The Total Start-Up Of Polyester Has Dropped To 65% Near The Low Polyester Filament Market.

After the Spring Festival in 2020, public health events had a great impact on all walks of life, especially in the production and circulation industries. The polyester industry under this influence is also facing the helpless situation that the market is short of trading and the industry is more passive. Recently, although the government has issued many documents and issued relevant policies to support enterprises to resume work and resume production, it is facing many objective inconveniences, and it is still unclear whether the market can resume in the short term.

The traditional maintenance season of domestic polyester enterprises is usually around the Spring Festival. Since late December 2019, polyester enterprises have started to stop or overhaul or reduce production. Before the Spring Festival holiday, 10 million 490 thousand tons of polyester capacity were overhauled. After the holiday, polyester enterprises should be in the stage of gradual recovery. However, under the influence of domestic epidemic, polyester repair enterprises have postponed the operation, and under the influence of logistics disruption, enterprises have high inventories, and some factories have started to reduce. The overall operation of polyester has been on a downward trend. After that, about 6000000 tons of polyester production capacity has been cut down or stopped. Up to now, the total start-up of polyester has dropped to a low level near 65%, far below the same level in previous years.

"There is no market price" - factories offer quotations, and there are few transactions in the market.


Since the beginning of this week, many polyester factories have begun arranging personnel to deal with work matters, and have quoted quotations from foreign suppliers, but the fact is, "there is no market price". The following reasons will be analyzed from three aspects.

1, the downstream businesses of Dacron have been postponed, and demand is weak.

As of February 14th, the load of the domestic terminal weaving industry was only 8%, and two weeks after the Spring Festival last year, it has returned to 65%. 8% of the start-up load has not been seen in the past spring. The demand for terminal weaving is at freezing point, and is still in a large area of downtime. The downturn of downstream enterprises directly depressed the demand for polyester.

2, the transportation is not smooth, the circulation of goods is difficult.

After the holiday, because of the demand for prevention and control of public health incidents, all localities have stepped up the control over the logistics and transportation industry. The measures are mainly to restrict the entry and exit of vehicles and personnel from non territoriality. Since the beginning of this week, although logistics management and control have been relaxed and the transportation has been resumed slightly, the control measures in different regions are different, which also leads to the unsmooth transportation and high cost of long distance transportation. The transportation of polyester staple fiber in China is mainly based on motor transportation, and the poor transportation links will bring inconvenience to the cross regional transaction.

3, prices are higher than market expectations.

After the holiday, the first thing is that the bulk commodities are down sharply due to public health events. According to statistics, in January 23rd, the prices of PTA and ethylene glycol were 4740 yuan / ton and 5110 yuan / ton respectively. In February 13th, PTA and ethylene glycol respectively closed at 4285 yuan / ton and 4340 yuan / ton, respectively, with a decrease of 455 yuan / ton (9.6%) and 770 yuan / ton (15.07%), while terminal weaving demand department. At the freezing point, the purchase amount of polyester is limited, polyester prices have not fallen synchronously, and stock has been increasing continuously.

As of February 13th, the FDY stock of polyester filament was 25.5 days, up 11.5 days from the same period last year, up 82.14% from the same period last year. The DTY stock of polyester filament is 33 days, up 22 days from the same period last year, up 200% compared with the same period last year. The POY stock of polyester filament is 24 days, up 15 days from the same period last year, up 166.67% over the same period last year.

It can be seen that the price of raw materials is far more than that of polyester staple fiber, and the cash flow of polyester filament POY150D has jumped to above 850 yuan / ton, which has exceeded the industry's expectations. Although polyester factories understand that the current quotation is not reasonable, they choose to be conservative before the market price center is clear. Faced with the current high price and many uncertainties, the space and willingness of traders to enter the market are also greatly suppressed.

The recent market trading atmosphere has improved significantly, and the textile market will recover quickly in the near future.

Since February 17th, the atmosphere of textile market has improved significantly. At present, seasonal alternation is a good time to sell spring clothes, but because of epidemic prevention and control traffic restrictions, long distance logistics (express) transportation is not smooth, and people all over the country try to stay at home, so the online and offline textile and clothing transactions are relatively light, and the textile market "frozen period" is forced to extend again.

March is the traditional peak season for textile market, and also the peak period of summer delivery. However, according to the layout of the epidemic prevention and control policy, the summer production of textile enterprises will be delayed. They not only have to face the problem of lowering inventory and rush orders, but also make overall plans for domestic and foreign markets, and look at changes in the whole industry.

It is understood that there are still large uncertainties in the development of the domestic epidemic. Many foreign retailers are worried that there may be further delay in delivery in China's textile production enterprises, so they plan to transfer the production of new orders to factories in Turkey and Vietnam.

For domestic textile enterprises, even if the orders received have been delivered on time, or can be issued with "force majeure proof" to reduce the loss of their own prior export delivery, it is impossible to estimate the effect of the cancellation of new orders. Therefore, textile enterprises should further enhance the status of industrial value chain, improve product quality, and make products produced by themselves irreplaceable. At the same time, textile enterprises should also pay close attention to whether the consumer demand suppressed in 1 and February will be released after the end of the epidemic. We should guard against the impact of excessive inventory in spring and the delayed production in summer on the autumn and winter market in the second half of the year. We should try our best to diversify our market strategy and deal with all kinds of sudden risks.

At present, all sectors of the industry focus on public health events. The root cause of the failure of polyester market is also related to this. The development of events has brought impact to the industry, and the next trend will also determine the extent of the impact on the industry. But the incident will eventually pass, and the resumption of downstream enterprises and logistics recovery will directly affect the improvement of the polyester staple market. We should continue to pay attention to it. (source: long Zhong information, Jin Lian Chuang chemical)