On August 30, at a critical point near the end of the traditional peak season, polyester factories once again started price reduction promotions, with prices as high as 600-800 yuan/ton: According to the editor, weaving companies have large price reductions at polyester factories. Under the circumstances, people have started to “buy, buy, buy”. Stimulated by ultra-low prices, production and sales have increased significantly. In the morning, some factories heard that they had reached 500%.
There is a saying in the textile market that polyester filament is “riding on a rocket” when it rises, and when it falls It’s like “squeezing toothpaste”, which means that the price of polyester yarn rises quickly and falls slowly. But this time the price fell so much all of a sudden. What is the reason? How have weaving companies responded to this?
Among the choices of low profit and high inventory
Currently polyester factories are more inclined to clear inventories
Since polyester filament production and sales declined in August, polyester inventories have begun to rise again. Although this kind of inventory is not as high as the absolute high caused by the epidemic last year, in the long run, it is still relatively high, and destocking has become a top priority in a certain sense. On the other hand, the entire polyester industry chain has been in a downward trend recently, and has experienced five large-scale profit promotions this month. From the profit point of view, the profits of downstream polyester have also deteriorated due to continuous price reduction promotions, and the entire market is filled with a gloomy atmosphere. Among the options of low profit and high inventory, it is obvious that the current polyester factories are more inclined to clear inventory operations.
The promotion does bring about an immediate effect of destocking. The motive of the polyester factory’s promotion is to clear the inventory. Judging from production and sales performance, the inventory clearance strategy was very successful, so this motive will no longer exist in a short time.
Polyester factory cuts meat
Weaving companies with replenishment needs have seized the opportunity
From the perspective of terminal demand, the weaving and fabric market in August has The thin situation is mainly due to the fact that the weaving market was largely overdrawn in advance in May. As time goes by, the editor believes that the overdrawn market will gradually be made up for, and future demand will return to normal. This year, most textile companies adopt a buy-and-use strategy when purchasing raw materials. This strategy also leads to the fact that the raw material inventory prepared by the weaving enterprises themselves is not high. In the case of large sales promotions in polyester factories, weaving companies naturally “buy, buy, buy” while taking advantage of the cheap prices. After all, such large price reductions are relatively rare this year. Therefore, in a short period of time, it will be difficult for polyester factories to promote polyester yarns on such a large scale. Weaving companies that need to replenish their stocks have already seized the opportunity.
Promotion cannot change the textile market
Production and sales may experience a periodic downturn
But in the long run, the impact may be really limited.
First of all, from a data perspective, if the operating rate of a weaving company remains basically unchanged, then the yarn it uses will The amount is basically constant, so it won’t make a very big difference. But from another perspective, for these weaving companies, when to buy silk is nothing more than a matter of time. If you buy it during a promotion, it means you will not buy it after the promotion. Looking at the long term, buying silk The total amount will not change significantly.
On the other hand, many textile companies now have limited working capital. If they buy a lot of silk , occupying a large amount of working capital, may in turn reduce the operating rate to control costs. For weaving companies, how much raw materials they purchase is closely related to changes in raw material prices and how many orders they receive. Throughout August, weaving companies generally received orders that were not as popular as expected, and gray fabric inventories among weaving companies continued to rise. According to data monitoring, the average inventory of gray fabrics in weaving enterprises in Jiangsu and Zhejiang markets has risen to about 40 days this week.
The current coldness of the textile market is due to the increase in raw material prices in the early stage, with a large increase and high valuations. However, the price of downstream gray fabrics has increased slightly, and the profits of gray fabrics have been compressed. The previous increase was entirely driven by macroeconomics and expectations. The orders from downstream fabric bosses are always in the blank period, and the authenticity cannot be verified. The current orders are still not large enough. At this time, at the same time, downstream and social inventory raw materials are fully replenished. On the other hand, the industrial chain buys up but not down. During the correction of raw materials, there are very few transactions in the middle and lower reaches, especially spot orders. Now that spot fabrics have become the mainstream, if the market wants to be popular again It must be supported by a huge number of “market goods”. However, market goods come into the market to stock up when various prices are at historically low prices. Now that the prices have dropped, it is natural not to think about purchasing, and the downturn is reasonable.
Faced with low-price promotions, the most important thing for textile companies is to keep a cool head and make decisions. Think about it before: Do you need these silks? To what extent can the company’s own liquidity support replenishment? How will the machine operating rate change after the market enters the traditional peak season? How to judge the next market? How likely is it that polyester prices will fall in the future…
After considering these issues comprehensively, make a decision A decision that is most beneficial to the development of the enterprise.
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