Currently, power restriction measures vary from place to place. And this week, what caused the polyester ring and textile people to “fry up” also came from the “some looseness and tightness” in the news of power rationing.
The reporter learned that at the beginning of this week, the Zhejiang Energy Bureau issued measures to suspend orderly electricity use. This is another region after Fujian to relax the power restriction policy. Yesterday, some areas in Jiangsu once again implemented the “dual control” policy, which will last from November 12 to December 31.
For the polyester market, the cancellation of power restrictions theoretically means that downstream weaving production returns to normal. As the startup rate rebounds, the pace of consuming raw materials accelerates, which is conducive to the consumption of weaving raw material inventories, shortens the polyester procurement cycle, and is conducive to the destocking operations of polyester companies. Comparing the operating rate after the end of the previous stage of production restrictions, a reporter from Futures Daily found that the actual operating rate did not increase significantly. Judging from the current actual situation, affected by the recent fluctuations in energy and raw material costs, the market mentality is still cautious, corporate production has not yet fully recovered, and market transaction enthusiasm has cooled down, and there is an obvious “expectation gap.”
The operating rates of polyester and weaving are the lowest in the same period in recent years
According to statistics from the Chemical Fiber Information Network (CCF), late September is the period when the power restriction policy has the greatest impact. Among them, the lowest textile machine start-up in Jiangsu and Zhejiang dropped to 40% (87% at the beginning of the month), the lowest loom start-up in Jiangsu and Zhejiang dropped to 37% (67% at the beginning of the month), and the lowest printing and dyeing start-up was only 20% (67% at the beginning of the month). With the cancellation of the power restriction policy, the loading of texturing, looms, and printing and dyeing in Jiangsu and Zhejiang rose to 79%, 82%, and 87% respectively on November 4. However, there has been a slight decline recently due to local power restrictions.
(Data source: Huarui Information)
According to data from Huarui Information, as of Friday, the average weekly load of polyester was 84.86%, an increase of only 0.3 percentage points month-on-month, and the increase was limited. Overall, power rationing has a direct impact on the industry’s operating rate. Under the influence of the power restriction policy, the polyester load also dropped to around 81% at the end of September, setting a new low for the year. The reporter learned that after the power restrictions were relaxed, the operating rate of the polyester segment did not rebound as quickly as expected. As of November 11, it was still around 85%, with an increase of less than 4 percentage points from the low point. Major textile manufacturers in Jiangsu and Zhejiang regions The base construction start-up is still around 70%, and the start-up of polyester and weaving is still at a lower level than in the first half of the year.
Why is there an obvious “expectation gap” in the current polyester market? Tianfeng Futures analyst Liu Siqi explained that this difference in the market is mainly due to the fact that polyester is currently facing weak production and sales, rising inventory pressure, and companies are cautious in resuming production.
In her opinion, as raw material prices continue to fall, the enthusiasm for purchasing terminal weaving raw materials has slowed down, and polyester production and sales continue to maintain a low level of 20% to 30%. Polyester factories Inventories have risen rapidly and cash flow has been compressed. Although the power restriction policy is currently relaxed, if the operating rate of polyester picks up quickly, polyester inventory pressure may further emerge.
“Since the relaxation of power restrictions has just been implemented, the current increase in polyester load is not large. Some factories plan to increase the load one after another, and some factories with high inventories are not enthusiastic about increasing the load. High. We expect the load of polyester to rebound slightly from November to December, but it will be difficult to return to the high level of about 90% before power restrictions.” Liu Siqi said.
The “power rationing” in Zhejiang and Fujian has been cancelled, but downstream orders are still weak
From an industrial perspective, after the impact of power cuts gradually subsided, the market began to gradually pay attention to the recovery of polyester and the demand side.
The peak season of the polyester industry is generally during the “Golden Nine and Silver Ten” periods. However, in recent years, the characteristics of the off-peak and peak seasons are not very distinct. There are often situations where the off-season is not weak and the peak season is not prosperous.
In previous years, there would be a wave of peak orders for polyester in the second half of the year in September and October, mainly from overseas “Christmas Season” orders and domestic “Double Eleven” and “Double Twelve” “Order. Affected by high shipping costs and weak domestic demand this year, orders in September were relatively bleak. Orders gradually recovered in October after power restrictions were tightened. The reporter learned that with the sharp drop in coal prices, the price of polyester raw materials has dropped sharply. Under the mentality of “buying up and not buying down”, terminals are less enthusiastic about purchasing raw materials. Polyester is once again facing a state of accumulated inventory and profit compression.
In this regard, Zhang Qiang, the relevant person in charge of China Silk City Network, told reporters that beforeZhu Lihang, a cargo analyst, said that with clear expectations for future inventory accumulation, it is difficult for low processing fees to achieve breakthrough growth.
For enterprises with low processing fees, they face the problems of inventory accumulation, falling product prices, and declining efficiency. Low processing fees mean huge losses for high-cost companies. Overall, it is more difficult for the industry to achieve stable operations through the traditional model. The reporter learned that PTA companies usually take maintenance measures when faced with low processing fees.
The same is true this year. From March to April this year, the processing fee of PTA dropped significantly and remained at 300-400 yuan/ton. More companies chose to overhaul, and some less competitive devices were gradually shut down. Entering October, most of the equipment has completed maintenance and repairs. This year’s “maintenance card” has been played. For companies, how will they deal with low processing fees in the future?
During the interview, the reporter learned that with low processing fees, as PTA futures and options become more mature, companies will also consider using financial instruments for risk management. For example, when there is a profit on the market, the processing profits will be locked in time; some companies will obtain part of the premium income by selling options and achieve the purpose of sales at the same time. In addition, many PTA companies have achieved horizontal and vertical integrated development. PTA companies have upstream and downstream supporting facilities, and their products are more diversified. Compared with a single product, their ability to resist risks has been continuously enhanced. </p
