As the epidemic situation continues to become severe, various regions in Zhejiang are also constantly upgrading epidemic prevention measures, affecting logistics and transportation in many places! At the same time, many listed companies, polyester factories, weaving factories, and printing and dyeing factories in Zhejiang have suspended operations and production due to the epidemic.
Temporary production suspension will delay product production and delivery
Seven more listed companies in Zhejiang have suspended production
Affected by the epidemic prevention and control in Zhejiang, on the evening of December 12, seven listed companies, Chunhui Intelligent Control, Zhongxin Fluoro Materials, Jialian Technology, Jingsheng Electromechanical, Jindun Shares, Sunshine Lighting, and Fenglong Shares, issued temporary production suspension announcements, plus Six listed companies, including Besme, Zhejiang Longsheng, Real Madrid Technology, Yaoshi Technology, Yangfan New Materials and Zhengguang Shares, have previously issued temporary production suspension announcements. Currently, a total of 13 listed companies have issued temporary production suspension announcements.
Zhejiang Longsheng stated in the announcement that the “Notice on Comprehensive Strengthening of Control Measures in the District” issued by the New Coronavirus Pneumonia Epidemic Prevention and Control Leading Group of Shangyu District, Shaoxing City on December 9, 2021: In addition to the need for epidemic prevention, Except for people’s livelihood protection, all other enterprises will suspend operations. Hazardous chemical companies must stop production in an orderly manner to ensure safety. Strictly implement the main responsibilities of enterprises and implement closed management based on enterprises as units. The company actively responded to the government’s epidemic prevention policy. All subsidiaries located in Shangyu Economic and Technological Development Zone, Hangzhou Bay, Zhejiang Province began to gradually reduce production and temporarily suspend production in an orderly manner from the afternoon of December 9, 2021. The specific time to resume normal production will be based on the requirements of the local government. Make arrangements.
Zhejiang Longsheng said that this gradual reduction and orderly temporary suspension of production will have an impact on the company. The company’s subsidiary located in Shangyu Economic and Technological Development Zone, Hangzhou Bay, Zhejiang Province currently mainly produces chemical products such as dyes, chemical intermediates, and water-reducing agents. It is expected that this gradual reduction and orderly temporary suspension of production will delay the production and delivery of the company’s above-mentioned products and will have an adverse impact on the company’s operating performance this month. However, the impact on the company’s overall performance in 2021 will be relatively limited. The specific extent of the impact is based on audited The 2021 annual financial report shall prevail. The company predicts that this suspension of production is a short-term measure for epidemic prevention and will not have an adverse impact on the company’s long-term development.
The operating rates of weaving, printing and dyeing dropped sharply in many places in Zhejiang
Some factories are preparing for holidays in advance
In addition, as the epidemic continues to spread, factories in Ningbo, Cixi, Yuyao and other places are “forced” to suspend production! It has been observed that the areas where the epidemic control has been upgraded are mostly concentrated in the polyester industry chain. According to statistics, in terms of the production capacity of the polyester industry chain in the three regions, PX, PTA, MEG, and polyester production capacity account for 35%, 18%, 6%, and 20% of the total domestic production capacity respectively. At the same time, Shaoxing, the center of the epidemic, is also a gathering place for national printing, dyeing and textile trade. Shaoxing’s printing and dyeing production enterprises are mainly concentrated in Keqiao and Binhai areas. In 2020, the output of printed and dyed fabrics by Shaoxing’s regulated enterprises was about 21.5 billion meters, of which Keqiao The district’s output is 19.15 billion meters, accounting for 89%, accounting for nearly 37% of the national output of 52.5 billion meters. Keqiao District is the largest textile trade center in Asia. As the first-level response scope for epidemic prevention expands, Ningbo, Shaoxing, and Hangzhou have a greater proportion of downstream products, which has a greater impact on the demand side.
At present, the flow of personnel and logistics transportation in many weaving factories, printing and dyeing factories in Zhejiang have been affected to varying degrees, and there are even reports of suspension of work and production in some cases. Therefore, the normal delivery time for the entry and exit of raw materials and finished products from the weaving factory and the dyeing factory is about 7-10 days, and normal on-site loading and delivery may be delayed or abnormal. , in addition to possible abnormalities in the logistics and transportation of weaving factories, printing and dyeing factories, and cargo delivery times, it is unknown whether the epidemic will continue to spread and escalate or when it will be eliminated. As a result, the risk of uncertainty in the market has increased, which has a negative impact on weaving factories. The printing and dyeing factory’s normal order taking and production impact has increased.
Data show that the start-up of circular knitting machines in Shaoxing has dropped slightly compared with last week. In addition, the start-up of the water-jet and warp knitting industries in some areas has also dropped accordingly. The comprehensive start-up rate of chemical fiber weaving last week was 56.37%, a month-on-month decrease of 2.56%. Due to the recent outbreak of the epidemic, some downstream factories are expected to start holidays in advance, and the operating rate is expected to continue to trend downward next week.
Zhejiang epidemic breaks supply and demand balance
Downstream may usher in a greater wave of holidays
Affected by the new mutant coronavirus “Omicron” in the early stage, the raw material side suffered a sharp setback. After nearly a month of decline, both parties seemed to be waiting for a signal as to whether the downstream order situation could be maintained. However, the recent epidemic in Zhejiang has upset the balance, once again destroyed market confidence, and may become the straw that breaks the camel’s back. The editor believes that as downstream transactions continue to be weak and orders are not continuing, the inventory pressure of raw material factories has become more prominent, and downstream procurement will also become more cautious., as the market declines at the end of the year, downstream will also usher in a greater holiday wave!
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