HEBEI WEAVER TEXTILE CO., LTD.

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Polyester: when will operating rate of downstream plants start reducing?

Operating rate of downstream plants extended higher for two weeks and the increment was bigger last week.

 

Operating rate of DTY plants rose to 65% in Zhejiang and Jiangsu by last Friday: at 60-70% in Xiaoshan and Shaoxing, near 70% in Changxing, around 60-70% in Taicang, near 80% in Changshu and around 40-50% in Cixi.

 

Operating rate of fabric mills ascended to 58% in Zhejiang and Jiangsu by last Friday: around 50-60% for water-jet mills in Wujiang, around 70% for water-jet mills in Changxing, at 60-70% for warp knitting plants in Haining, around 60% for warp knitting plants in Changshu, above 40% for circular knitting plants in Shaoxing and around 40% for circular knitting mills in Changshu, and around 50-60% for water-jet plants in North Jiangsu.

 

Operating rate of dyeing plants increased to 70% in Zhejiang and Jiangsu by last Friday: around 60-70% for plants in Xiaoshan and Shaoxing, below 70% in Wujiang, near 70-80% in Changshu, Changxing and North Jiangsu, and at 80-90% in Haining.

 

The operating rate of fabric mills also increased slowly in South China, up to around 32%: at above 40% in circular knitting plants and warp knitting mills in Fujian, at around 20% for circular knitting mills in Guangdong and at 40-50% for warp knitting plants in Guangdong.

 

Price of PFY also started rising in Fujian but the increment was smaller than that in Zhejiang and Jiangsu.

 

Operating rate of polyester fiber companies and downstream plants in recent half a month (%)

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The operating rate of downstream plants moved up but that of PSF and PFY companies extended lower.

 

Orders and operating rate of fabric mills and printing and dyeing plants rapidly increased due to some speculative procurement and some rush orders. On one hand, some printing and dyeing plants announced holiday schedule earlier than the gas supply firms, mainly in early-Jan. As a result, some factories are eager to finish orders and complete delivery. On the other hand, some plants worry whether workers can come to their position in time due to the worse spread of pandemic. They try to finish the production in Dec rather than delay it into Jan. According to the spread of pandemic in Zhejiang and Jiangsu, some factories may encounter labor shortage this week.

 

Therefore, high operating rate of DTY plants, fabric mills and printing and dyeing plants may continue only within Dec. Falling run rate is expected to appear from late-Dec to early-Jan.

 

The stocks of feedstock were accumulating and those of PFY have fallen to below 20 days amid low run rate. The inventory of POY, FDY and DTY was at 18.6, 19 and 18 days respectively now in Zhejiang and Jiangsu. Some varieties have been in shortage, especially DTY.

 

Around 1.3 million tons of polyester units will have turnaround before Jan, mainly PFY companies. Near 2 million tons of polyester plants are scheduled to resume operation, mainly PET bottle chip companies. If other factories do not ramp up operating rate and the run rate of PFY companies does not change, the accumulation of inventory may be not fast in PFY companies even if feedstock cost is weak. Therefore, price of PFY is anticipated to be stable.

 

Rigid demand is estimated to enjoy support in early-Jan. For PFY and PSF producers, whether the stocks can decrease later will depend on downstream buyers’ expectation toward feedstock procurement after the Lunar New Year’s holiday. If downstream buyers are active in restocking, the inventory of PSF and PFY will reduce further and factories may ramp up run rate, but the spread of pandemic will affect the workers, which is a big uncertain factor.


Post time: Dec-26-2022