Due to the power outage shutdown from the third to fourth quarter of 2021, and the possible forced shutdown of polyester factories around Hangzhou in September 2022, many polyester factories did not arrange maintenance during the Spring Festival this year, resulting in a high operating rate in the industry.
As of last Friday, the comprehensive operating rate of domestic polyester was 89.19%, 5.27% higher than before the holiday. With the continuous opening of polyester factories, polyester production has increased significantly. In terms of polyester filament, the average operating rate of enterprises is 89.1%. Tiansheng, Xinxin, Shenjiu and other devices have restarted, and the overall operating rate has increased significantly. In terms of polyester staple fiber, the overall operating rate of enterprises is 83.89%. Parking devices have basically restarted around the Spring Festival, and in the near future There is currently no maintenance equipment, so the start-up has increased significantly. Polyester PET: The average operating rate of fiber-grade PET factories is 88.79%. A 250,000-ton polyester device in Hubei has resumed production. The average operating rate of bottle-grade PET factories is around 92.04%. The average operating rate of mainstream manufacturers’ installations remains high.
Looking at the weaving market, according to data, as of February 17, the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang was 49.94%, a month-on-month increase of 18.84%. At present, most downstream textile and weaving companies have resumed work, and the resumed companies have fully put into production. However, the number of new orders is relatively scarce, coupled with factors such as the delay in the return of migrant workers, most downstream users only maintain low levels of operation. At present, there are only a small number of spring and summer orders domestically, and most of them are orders received many years ago. In terms of foreign trade, profits are relatively limited due to raw material prices and sea freight. Therefore, the negotiation time between buyers and sellers is lengthened, and traders’ resistance is rising. The current market is still at a low level. During the stagnation stage, the consumption of finished goods inventory in the factory slowed down.
The supply is high but the demand is declining. The unmatched start-up of upstream and downstream has led to a surge in pressure on upstream raw materials. Coupled with the return from the holiday, polyester production and sales have been light, with average production and sales less than 50%, and polyester product inventories have increased rapidly.
It is understood that the inventory of FDY and DTY has been around 30 days, POY inventory has been around 25-26 days, and polyester short inventory has been around 14 days. The inventory of each product has refreshed the high point of last year. Downstream polyester inventories also continue to rise. Among them, staple fiber product inventories are close to historical highs, and filament yarn inventories are also continuing to rise, both at the highest levels in the same period in history. The weak production and sales of polyester has also suppressed the enthusiasm of polyester factories to purchase raw materials, resulting in a slow downward transfer of raw material inventories.
Can high operating rates be maintained?
Mainly depends on whether the inventory can be digested to normal levels
High production capacity and high inventory are the current status quo of the polyester market. Whether the subsequent high production capacity can be maintained mainly depends on whether the inventory can be digested to normal levels. At present, there is still room for price reduction and promotion of polyester efficiency, and terminal demand is also recovering, making it difficult to effectively evaluate. If the subsequent price reduction and promotion are effective, the high polyester production capacity is expected to be maintained. “From what we have learned so far, terminal orders are not particularly ideal, and they are mainly focused on processing pre-holiday orders. Compared with everyone’s optimistic expectations before the holiday, it is indeed somewhat unsatisfactory, and further tracking is needed in the future.
“Judging from the current news, the Suzhou area has been affected by the epidemic, and there are indeed some inconveniences in logistics, which has affected the recovery progress of the downstream to a certain extent. At least from the perspective of the load on the polyester factory, it has not been greatly affected.” Zhu Lihang said that because the terminal is still in the recovery process, the specific impact is difficult to judge for the time being. However, the current epidemic situation in Suzhou is still under control and will not have much interference with the operation of enterprises.
The next half month is critical
Whether the market can start depends on this
However, the market subsequently showed signs of weakness. Zhongda Market officially opened on the 10th, but cloth shops and weaving mills were slow to return to work. The epidemic in Guangxi had an impact on the return of some Zhangcha weaving factory workers. Generally speaking, weaving factories basically resumed production after the 15th day of the first lunar month. However, since the Zhongda Market opened, the daily flow of people has not been high, and the market performance has been quite dull. Some cloth factories have not yet recruited all their workers, and their operating rates are not high. Some banks said that the market started to boom in the same period last year, but this year there is no sign of starting until the 15th, and the “gold, three, silver and four” may be cold. At present, the overall quotations in the market are chaotic. After the new year, the quotations of raw materials will often increase by more than 500 yuan/ton, and the gray cloth prices will mostly increase by 0.2-0.4 yuan/meter. However, it is difficult for end customers to accept it, and the actual transactions are often profitable. At present, the goods that have started to be shipped are still mainly orders received in advance before the holiday. It is expected that some spring and summer proofing orders will be issued in the future, but everyone’s mentality has gradually become cautious and pessimistic. The market’s confidence in the market outlook has gradually weakened, and raw material prices have generally fallen by 100-300 yuan/ton recently. In general, the next half month is critical, and whether the market can start will depend on this.
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