In November, the textile off-season atmosphere became more intense, and the market entered the traditional off-season for sales. Prices fell, but no one took delivery.
As the upstream of the textile industry, polyester companies could no longer hold on and began to suffer losses. They could only reduce production and stop production to protect prices. According to market news, last Thursday there was news of production cuts and price guarantees from the four major polyester companies, involving 23 million tons of polyester production capacity, accounting for more than 30% of the total polyester production capacity, and currently plan to reduce production by 25%. The main reason for the production reduction of several major polyester companies is the lack of profits and the recent excessive decline of products.
It is reported that since October, the price of polyester filament has been in a downward channel. Occasionally, bullish news stimulated the increase, but it did not last. Without substantial positive support from the terminal, it is difficult for polyester prices to improve. Especially now that the textile market has entered the traditional off-season, polyester prices have started to fall, fall, fall again.
The extent of production cuts remains to be seen
The market is worried about the possibility of large-scale production cuts in the future
At present, it remains to be seen how much polyester companies will reduce production.
For polyester factories, under the current predicament, they can only alleviate the contradiction by limiting production. Some netizens calculated the details as follows, you may wish to use them as a reference: Calculate the total maintenance of Hengyi plus other factories is 220W + 300W = 550W. Among them, Hengyi is calculated based on full inspection, that is, all 220W will be suspended for one month from November 28; other factories are calculated based on rotation inspection, that is, 300W will be divided into two batches starting from November 28, with 150W inspected first and then 150W inspected, and each inspection will take 20 days. . After the centralized production reduction was resumed in early January, maintenance during the Spring Festival was still carried out as originally planned. As a result, the polyester load from December to January is adjusted to 82.7%-82.8% (originally from December to January, it was 88-83%).”
According to industry insiders, there have been many joint production cuts in polyester factories in the early stage, but the results were not good. After all, the production cuts will not change the real terminal demand. The news has attracted widespread attention mainly because the current polyester market situation is relatively pessimistic, and the market is worried about the possibility of large-scale production cuts in the future.
However, the production cuts by polyester companies will undoubtedly affect the demand for polyester raw materials in December. If production restrictions continue to be expanded in the future and production starts to fall even further, the contradiction between supply and demand of polyester will be transferred to PTA and ethylene glycol to a certain extent. superior.
It is not difficult to see from the spot and futures trends of polyester upstream PTA and ethylene glycol on Friday that the mentality of the entire industry chain is relatively pessimistic and difficult to reverse in the short term.
The industry generally responds that there is too much pressure on the end-use weaving process.
Not willing to accept the goods!
For the textile market in recent years, the COVID-19 epidemic has disrupted the production rhythm of domestic garment companies. Export orders are pitifully few, and the domestic trade market is not optimistic. The long off-season makes it difficult for the entire industrial chain to bear the burden.
In previous years, there would be a wave of order peaks in September and October due to the impact of overseas “Christmas season” and domestic “Double Eleven” and “Double Twelve” orders. However, this year, affected by high shipping costs and weak domestic demand, orders in September were relatively bleak, and orders in October have been missed due to power and production restrictions.
Recently, the market has returned to a familiar scene: growing concerns about a mutated new coronavirus. The BBC reported on November 26 that scientists described B.1.1.529 as “terrible” and the worst mutated virus they have ever seen. On November 26, local time, the WHO held an emergency meeting and issued a statement, listing the new coronavirus variant B.1.1.529 as a “mutant strain of concern” and naming it Omicron. “Variant of concern” is the WHO’s highest level. Among them, there are currently four strains of the highest-level VOC, and the well-known Delta mutant strain is one of them.
After the emergence of the new virus strain, oil prices, European and US stock markets plummeted. The emergence of Omicron caused the panic index to rise to the highest level in the past two months. It coincided with the traditional American holiday of Thanksgiving, and European and American investors encountered an unusually tragic “Black Friday”.
Therefore, the current order and construction situation in the terminal market is still not optimistic, and the market is relatively light. Before there is a significant change in terminal demand, hot production and sales may still be a pulse-type “flash in the pan”, mostly due to the stocking needs of downstream companies, and high production and sales may not be sustainable for a long time.
Now that Double Eleven has passed, the last wave of market trends in the domestic market at the end of the year has also passed. In the later period, the number of replenishment orders during Double Eleven is small; export orders are also in jeopardy due to the new virus that is rampant again. At the same time…As the end of the year approaches, textile companies have increased cash flow needs and need to pay for spare parts, water and electricity bills, wages, bonuses, loans and interest. Some companies have resorted to methods such as selling inventory and quickly realizing cash to maintain production. The desire for raw material procurement will become more cautious. Later, the editor felt that the current development of the market mainly depends on the continuation of polyester factory production cuts, downstream power restrictions, and consideration of the volatility of overseas epidemics.
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