Polyester production reduction and price guarantee VS mutant virus panic: The contradiction between supply and demand is intensified, and the choice of downstream textile enterprises is too difficult!

In November, the textile off-season atmosphere became stronger and the market entered the traditional off-season. Prices fell, but there was still no one to pick up the goods.
As the upstream of the textile industry, polyester companies can't hold on and start to lose money, so they can only reduce and stop production to insure their prices. According to market news, last Thursday, the four major polyester companies reported production cuts and price-guaranteed news, involving 23 million tons of polyester production capacity, accounting for more than 30% of the total polyester production capacity, and the current plan to reduce production by 25%. The main reasons for the reduction in production of several major polyester companies are the lack of profits and the recent excessive decline in products.
It is reported that since October, the price of polyester filament has been in a downward channel, and occasional news has stimulated the increase, but it does not continue. Without substantial support from the terminal, the price of polyester will not improve. Especially now that the textile market has entered the traditional off-season, the price of polyester yarn has started to fall, fall, and fall again.
The extent of the production cut remains to be seen
The market is concerned about the possibility of subsequent large-scale production cuts
At present, the extent of the reduction in production of polyester enterprises remains to be seen.
For polyester factories, under the current predicament, the only way to alleviate the contradictions is to restrict production. Some netizens calculate the details as follows, you may wish to make a reference: according to the total maintenance of Hengyi plus other factories 220W + 300W = 550W. Among them, Hengyi is calculated by full inspection, that is, 220W will be shut down for 1 month from November 28; other factories are calculated by round inspection, that is, 300W will be divided into two batches from November 28, 150W and then 150W, each for 20 days . After the concentrated production reduction was restored in early January, the maintenance efforts during the Spring Festival were still carried out as originally planned. As a result, the polyester load from December to January was adjusted to 82.7%-82.8% (previously 88-83% from December to January)".
According to industry insiders, there have been many joint production cuts in the polyester factories in the early stage, but the results were not good. After all, the production cuts will not change the real demand of the terminal. At present, 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 a large-scale production reduction in the future.
However, the reduction in production of polyester enterprises will undoubtedly affect the demand for polyester raw materials in December. If production restrictions continue to be expanded in the future, and the start of work will drop more significantly, then the contradiction between supply and demand of polyester will be transferred to PTA and ethylene glycol to a certain extent. superior.
From the trend of the spot and futures of PTA and ethylene glycol upstream of polyester on Friday, it is not difficult to see that the mentality of the entire industry chain is relatively pessimistic, and it is difficult to reverse it in the short term.
The industry generally responds to too much pressure in the terminal weaving link
Unwilling to receive the goods!
For the textile market in recent years, the new crown pneumonia epidemic has disrupted the production rhythm of domestic apparel companies. The export orders are poor, and the domestic trade market is not optimistic. The long off-season makes it difficult for the entire industrial chain to bear its weight.
In the past, September and October were affected by overseas "Christmas season" and domestic "Double Eleven" and "Double Twelve" orders, and there will be a wave of order peaks. However, this year, affected by high ocean freight rates and weak domestic demand, orders in September were relatively bleak, and orders in October have missed a wave of ordering seasons due to power restrictions 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 mutant virus they have ever seen. On November 26, local time, the WHO held an emergency meeting and issued a statement, listing the new coronavirus mutant strain B.1.1.529 as a "mutant strain that needs attention" and named it Omicron (Omicron). "Variants that need attention" are the highest level of WHO. Among them, there are currently four strains of the highest grade VOC, and the well-known Delta mutant strain is one of them.
After the emergence of the new strain, oil prices, European and American stock markets plummeted. The emergence of Omicron brought the panic index to its highest level in nearly two months. It coincided with the traditional American holiday Thanksgiving, and European and American investors encountered an unusually tragic "Black Friday."
Therefore, the current order and start of the terminal market is still not optimistic, and the market is relatively thin. Before the terminal demand has changed significantly, production and sales are booming or a kind of impulsive "short-lived", mostly for the stocking needs of downstream enterprises, and high production and sales may be difficult to sustain for a long time.
Now that Double Eleven has passed, the last wave of the domestic market at the end of the year has also passed, and the number of replenishment orders for the later Double Eleven is less; export orders are raging again due to the new virus, and orders are also at risk. At the same time, the cash flow demand of textile enterprises is entering the end of the year. The increase requires payment of spare parts, utility bills, wages, bonuses, loans and interest. Some companies have adopted methods such as dumping inventories and realizing quickly to maintain production. The desire to purchase raw materials will become more cautious. Later editors feel that the current development of the market mainly depends on the continuation of the production reduction of the polyester factory in the later period, the downstream power curtailment and the consideration of the volatility of the overseas epidemic.