As the country’s abnormally high temperatures continue and demand for electricity surges, Sichuan, Chongqing, Zhejiang, Jiangsu, Hubei, Anhui and other places have launched power rationing policies, and many industrial companies have received notices of power outages and peak-shifting power consumption.
Many polyester factories change production plans
Textile enterprises are “walking on thin ice” in replenishing their inventory
The emergence of power rationing has obviously disrupted the original production rhythm of polyester and weaving factories!
A small polyester manufacturer in Ningbo had planned to slightly increase its load in mid-to-early August as the traditional peak season was approaching. However, due to the impact of power cuts, its load dropped again, to around 50%. A polyester manufacturer in Shaoxing Last week, the negative price increased slightly due to the recovery of cash flow. Under the power restriction policy, production capacity was reduced again, and a polyester yarn manufacturer in Hangzhou stopped all texturing. As the downstream continues to be weak in the near future, although the current power cuts have caused a slight decline in filament load, it just gives polyester manufacturers an opportunity to relieve inventory pressure.
Due to the current power restrictions in Jiangsu and Zhejiang, downstream demand in Jiangsu and Zhejiang has led to a decline in terminal operations. Among them, the comprehensive operation of texturing has dropped to 42%, the comprehensive operation of looms has dropped to 39%, and the comprehensive operation of printing and dyeing has dropped to 48%. The start-up of the downstream industry may be delayed compared with previous years, and the downstream inventory is still high, which will still take time to digest.
A medium-sized weaving company in Shaoxing, Zhejiang said that due to the impact of power restrictions and production restrictions, the company could only adjust workshop production to one shift in the evening, resulting in some traceable orders facing the risk of insufficient production capacity and inability to deliver on time. Although it is in line with the United States, the European Union, etc. The customer repeatedly negotiated and tried to extend the contract for 5-7 days, but the effect was not ideal. In order to reduce the risk of claims and reputation damage, the company has dispatched some export orders to foundries in Henan, Shandong and other places. Not only is it required to use 100% US cotton and Brazilian cotton as cotton spinning yarn, but the delivery time is only about one and a half months. , if delivery and shipment cannot be made as scheduled, claims will be made to the OEM.
A foreign trade company in Suzhou believes that for textile and clothing exports, large-scale power and production restrictions will not only extend the delivery time of manufacturers, but also affect the stocking cycle and increase inventory pressure. Since it is impossible to determine whether the power restriction measures will be upgraded and when they will end, foreign trade companies and textile and garment enterprises have been very cautious in accepting traceability orders since August. The inventory of cotton yarn and other raw materials has also been pushed to a low level, which directly affects domestically imported cotton spinning and imported yarn. Sales, downstream and terminal replenishment are “walking on thin ice”, transactions continue to be in a state of “little market value”, and market confidence is weak.
A brief respite recently
It is still difficult to predict when peak power consumption will end
By mid-to-late August, the high temperature weather is expected to ease in the near future, but the “reverse drought in the flood season” in the Yangtze River Basin under this year’s arid climate is still an uncertain factor leading to when power cuts will be eased. As of August 22, in order to ensure the security of the power grid and people’s livelihood electricity needs, polyester yarn manufacturers in Shaoxing, Changshu, Taicang and other places are still strictly limiting power. The downstream operating rate continues to decline. When will industrial power companies suspend production or use off-peak electricity? The end is still difficult to predict.
With many macro events this year and wide-ranging impacts, this high-temperature power rationing will undoubtedly delay the recovery of downstream demand. Although the traditional peak season of the Golden Nine and Silver Ten is coming in the next four quarters, the overall downstream demand will be compounded by the impact of the epidemic in the first half of the year. Under the current high temperature and power shortage, it is difficult to reverse the decline. Judging from the data on social retail sales, current data still points to weak domestic demand. The year-on-year growth rate of total social retail sales in July dropped to 2.7% from 3.1% in June. The overall decline in social retail data reflects weak domestic demand, and the rebound in downstream demand for the Gold, September and Silver Tens is still not optimistic by most industry insiders.
With the overall epidemic situation in my country basically stable and dynamic clearing gradually normalized, my country’s downstream demand may rebound in the second half of this year. The cash flow of polyester manufacturers has also reversed its previous loss situation, and this time the high temperature weather is the most in the same period in history since 1961. Due to force majeure factors, the upstream and downstream demand for polyester has worsened, and the start-up of downstream weaving and texturing enterprises and the recovery of terminal demand have been delayed again.
</p
