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Raw materials rise against the trend and mills strive to maintain cash flow

Today, the research team of China cotton information network continued to investigate in Xiaoshan, Hangzhou, and held a small exchange meeting with several local chemical fiber manufacturers. Everyone spoke freely and discussed the current enterprise situation and chemical fiber textile situation.

One of the manufacturers, mainly eddy current spinning, immediately felt that the market was not good after the start of construction in March. Half of the production capacity was closed at the beginning of April, belonging to the local enterprises with earlier capacity reduction. Therefore, the current inventory of finished products is less, the production and sales are basically balanced, so the cash flow is relatively abundant.

Another chemical fiber factory is still fully open at present, with a monthly yarn output of about 650 tons. At present, the production and sales rate is only half, and the remaining half can only be kept as inventory. Therefore, the finished product inventory of the factory is far higher than that of the same period last year. The head of the plant said that the reason why the production capacity has not been reduced so far is that the severity of the epidemic has been underestimated, and the market will not be depressed for a long time, so the production has not been reduced. He hopes to protect workers and avoid that no one can be recruited when the market improves. However, the cash flow has also been tightened. If the inventory continues to rise, he can only choose to reduce production.

It is understood that the average operating rate of the local chemical fiber factory is between 50% and 60%, and the average operating rate of the downstream dyeing and finishing factory is about 60%. The epidemic led to a significant reduction in export orders, which had a great impact on the whole industry. There have been sporadic closures or bankruptcies of factories. However, the overall production capacity is still seriously oversupplied, so the price competition between each other is intense, and each factory is not making profits or even slightly losing money.

From the perspective of the whole industrial chain, the raw material end occupies a high profit point, because the raw material enterprises are relatively concentrated, several large-scale petrochemical enterprises almost form a monopoly in the industry, and the price is relatively uniform. Recently, crude oil rebounded sharply, so the price of polyester staple fiber also followed the rise, up 100 yuan / ton in a week, and the downstream can only accept it, so the bargaining power is very low. And the downstream yarn can not follow the price rise, only hope to be able to produce as much as possible to reduce inventory pressure.

In the face of severe foreign trade situation, the local government has also given some support measures, such as reducing 5% of the electricity fee, reducing the burden of corporate social security, etc., but for the mills, the turning point of consumption does not appear, and other stimulus policies can only be a drop in the bucket. There are many different opinions on how to interpret the future market. Some people are optimistic that the domestic market is still promising. Some grey cloth traders reported that due to the improvement of domestic demand and the backflow of orders in Southeast Asia, orders in hand could be arranged to July. Pessimists think that in the short term, they can not see the hope of improving consumption, and even have the idea of changing careers. This part of enterprises think that the textile industry in the long run is the trend of transferring to Southeast Asia. Even if there is no black swan such as epidemic situation, the good days of the mills may be greatly reduced.