On July 29, the Industrial Division of the Zhejiang Provincial Development and Reform Commission held a symposium on the chemical fiber industry in Zhejiang Province. From 11 key chemical fiber enterprises in the province such as Tongkun, Hengyi, Xinfengming, Rongsheng, Tiansheng, Quandi, Guxiandao, Hailide, Yufu, Huafeng, Huading and Zhejiang Textile Industry Association Representatives attended the meeting and made exchange speeches, reporting on production and operation conditions and major difficulties in the first half of the year, analyzing the market situation in the second half of the year, and putting forward policy demands and suggestions.
The largest province in chemical fiber: output 32.1 million tons
In the second half of the year, the demand side will strengthen its support for the market.
It is reported that this chemical fiber industry symposium was held in accordance with the work deployment of the National Development and Reform Commission on establishing an industrial observation of the light textile industry in our province to efficiently coordinate epidemic prevention and control and manufacturing enterprise production, strengthen industrial economic operation monitoring and analysis, and ensure The order of industrial production is stable, helping enterprises solve difficult problems in production and operation, and promoting steady growth of the industrial economy. This symposium was only more than a month away from the symposium also focused on chemical fiber held by the Zhejiang Provincial Department of Economics and Information Technology on June 8. The recent development of the chemical fiber industry has received such attention from the provincial economic authorities. Businesses are encouraged.
Data show that chemical fibers account for about 85% of my country’s total textile fiber processing, and my country’s chemical fiber output accounts for more than 70% of the world’s. Conventional fibers maintain the leading international level, and some high-performance fibers have reached the international advanced level. The industrial chain and supply chain are safe and stable. Its nature and competitiveness are increasing day by day, providing a solid guarantee for the construction of a strong textile country. Zhejiang Chemical Fiber accounts for nearly half of China’s chemical fiber output. It is the largest province in the country’s chemical fiber industry and the world’s largest chemical fiber production base. In 2021, the total industrial output value of the chemical fiber industry above designated size in Zhejiang Province was 316 billion yuan, and the chemical fiber output was 32.1 million tons, accounting for 49.2% of the country’s total chemical fiber output and more than 30% of the world. The output ranked first in the country, and a number of companies with advanced technology and equipment have emerged in the country. A leading chemical fiber enterprise with great influence abroad.
Leading companies gather for a meeting again!
Representatives attending the meeting believed that compared with the situation at the beginning of the epidemic in 2020, this year’s situation presents the characteristics of multiple overlapping difficulties. In the first half of 2022, the textile and garment industry will be in a situation of rising costs, declining supply, and sluggish demand; operating rates have declined, and economic benefits have The production and operation of enterprises have been greatly affected, and the entire industry has experienced a phenomenon of “slow peak season and even weaker off-season”.
In the second half of the year, the impact of rising costs on the chemical fiber-textile industry chain will weaken. It is expected that with the arrival of the peak textile and clothing consumption season “Golden Nine and Silver Ten”, the demand side will strengthen its support for the market. Under the influence of residents’ consumption tendencies, in the second half of the year It is difficult for the textile and apparel industry to regain high growth, but with the arrival of the peak consumption season, industry demand will be restored to a certain extent.
Terminal demand has not improved
The pressure for polyester load recovery in the third quarter is greater
In March 2022, with the outbreak of the Russo-Ukrainian war, cost-end crude oil prices rose sharply. Affected by the domestic epidemic, polyester profits began to decline rapidly under the background of strong costs and weak demand. The period from late March to early May was a period of comprehensive losses. It was not until May that the domestic epidemic gradually eased, logistics became smoother, polyester prices broke through and rose, and benefits began to recover. The difficulties faced by polyester in the second half of June were the same as those in March. The negative feedback caused by the rapid decline in polyester raw material prices led to an increase in polyester cash flow losses. At the same time, the dividends of inventory appreciation since May disappeared and polyester companies faced rapid depreciation. The pressure on polyester companies with high inventories, especially leading companies, to reduce production has once again increased.
Against this background, several leading polyester companies plan to self-disciplinely reduce production by 30% again. Under high cost and weak demand, textile profits have dropped significantly. Due to factors such as efficiency issues, hot weather, high inventory to be destocked, and off-season demand from July to August, demand improvement lacks class-based weakness. The combination of high temperature weather and increased willingness to destock polyester has resulted in a decline in demand. The price efficiency of polyester is likely to decline again. Because the epidemic slowed down the progress of the project and the industry was in recession, only 2.71 million tons of new polyester production capacity was launched in the first half of the year. The growth rate of polyester production in the first half of the year was -1%. In the second half of the year, the epidemic will ease and the resumption of work and production will accelerate. The launch of new polyester production capacity is expected to accelerate, and the annual polyester production growth rate is expected to be 3%. The acceleration of the commissioning of new equipment will suppress the industry’s load recovery. Due to safety inspections and efficiency reasons, the polyester load has dropped again recently, and the pressure for the polyester load to recover is still high.
Improvement in terminal demand may have to wait until late September, but don’t look forward to the “peak season” in the second half of the year. The probability is lower than expected, the intensity is limited, and the duration is short.
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