In late November, polyester factories were affected by finished product inventory pressure and production efficiency. On November 25, four polyester factories planned to reduce production by 20% based on their current actual output, and later the production reduction was increased to 25%.
What is the actual effect of the current production reduction?
From an item perspective, as of December 2, 2021, the domestic polyester filament operating load was 77.11%, -6.19% month-on-month; the polyester staple fiber operating load was 67.02%, month-on-month -1.31%; the polyester bottle flake operating load remained at 78.46% constant. Overall construction starts are also at a nearly five-year low.
The polyester production rate has dropped sharply. According to common sense, the market supply will inevitably reduce production, which will definitely boost the market. However, it is understood that after the production limit of polyester filament, there is still no escape from the curse of promotion. Production and sales show a pulse pattern. However, with the promotion The frequency is accelerated and the promotional effect is greatly reduced.
At the same time, the polyester product market has recently begun to see significant price reductions in shipments. Low prices are emerging in the market, and the market center of gravity continues to decline. Polyester yarns have still had significant discounts in the past two days, with the highest promotion being 400 yuan/ton! The current price of polyester filament POY 150D is 7,250 yuan/ton, the price of polyester filament FDY 150D has dropped to 7,450 yuan/ton, and the price of polyester filament DTY 150D has dropped to 8,880 yuan/ton. Some varieties with larger declines have reached 3,000 yuan/ton.
In the face of the collapse of bulk raw materials
Of course, the giant’s production restriction is insignificant
Because the polyester industry chain has been highly centralized by polyester leaders, in the past years, as long as the polyester giants jointly limited production, it would inevitably set off a burst of crazy purchasing in the downstream market. Why is it still difficult to boost the market this time when the giants jointly limit production?
The reason is that, on the one hand, the market is once again worried about the new super coronavirus variant, which will affect demand recovery, and the price of the entire industrial chain, including oil prices, has collapsed. In the face of the collapse of bulk raw materials, the giants’ production restrictions are of course insignificant.
Against the backdrop of historically low loom operating rates in the past nine years
The polyester operating rate of 77.11% is obviously making a mountain out of a molehill
On the other hand, the contradiction between supply and demand is still the biggest problem. Judging from the annual production and sales, the production and sales rates of long yarn, short fiber, and chips in 2021 are relatively flat, and the number of high production and sales is significantly reduced compared with 2020. The market risk aversion has increased, and downstream The wait-and-see mentality is strong, and downstream demand is weak and difficult to change. At the same time, terminal weaving companies also performed poorly in receiving new orders. Due to the sharp rise in fiber prices in the early stage, foreign trade orders were more cautious; as the “Double Eleven” gradually passed, new domestic trade orders also dropped significantly. Data shows that the weaving order index from September to November was at a low level for the same period in previous years, and new terminal orders were lower than in previous years. At the same time, due to high inventory levels and lack of motivation for stocking up in winter, early holidays have occurred in many places.
Due to poor terminal orders and rapid depreciation of products, companies are not willing to start up. As of December 2, 2021, the comprehensive start-up load of Jiangsu and Zhejiang looms was around 65.31%, -2.98% month-on-month, which was actually at the lowest level in the same period in the past nine years. Against the background of the historically low loom operating rate in nine years, the polyester operating rate of 77.11% is obviously making a mountain out of a molehill!
The highlighted contradiction between supply and demand has forced companies to frequently promote shipments this year. As far as domestic demand is concerned, as of October 2021, retail sales of goods have increased by 4.9% year-on-year, and the growth rate has accelerated by 0.5 percentage points from the previous month; but after deducting In terms of inflation factors, the overall actual growth rate of social commodity retail sales showed a downward trend, with the growth rate slowing down by 0.6 percentage points from the previous month. Among them, the cumulative year-on-year growth rate of clothing, shoes, hats and knitted goods was 17.4%, and the cumulative year-on-year growth rate of online “wear” goods was 14.1%. Compared with the growth rate in previous years, the cumulative year-on-year growth rate was 17.4%. Points continue to decline, and the overall domestic sales of textile consumer goods is poor. In terms of external demand, although some overseas importers placed orders in advance in anticipation of rising sea freight, entering December, the mutant virus epidemic and high sea freight still caused negative pressure on overseas demand in the future. The current corporate cash flow and corporate debt situation are far from optimistic. The ability of corporate speculative stocking has declined, so actual procurement demand will also lose its explosive power.
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