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Insight | Time: Sep 27 2019 8:28AM
Polyester downstream O/R to touch periodical low amid holiday
 
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Price of polyester filament yarn was in narrow consolidation in Sep
The lowest and highest price of POY semi-dull 150/48 was at 7,675yuan/mt and 7,950yuan/mt respectively, with the range at around 275yuan/mt, that of FDY semi-dull 150/96 was at 7,600yuan/mt and 7,840yuan/mt respectively, with fluctuation range at around 240yuan/mt, and that of DTY semi-dull 150/48 was at 9,050yuan/mt and 9,275yuan/mt respectively, with changing scope at around 225yuan/mt. Comprehensively, gap of the highest and lowest price of polyester filament yarn was mainly within 300yuan/mt in Sep.


Sales improved periodically when price was low, and inventory accumulated when price was high. Overall stocks changed limitedly

Sales of PFY experienced 3 round of improvement since the beginning of Sep, but lasted short, mainly lasting for below 1-2 days. Generally, the highest and lowest stocks of POY, FDY and DTY differed within 3 days.


Operating rate of downstream plants slightly increased in Sep compared with Aug, and PFY plants did not see big inventory burden supported by rigid demand. Cash flow of PFY was tolerable, especially POY.

Therefore, operating rate of PFY industry was slanting high now in the second half of 2019, around 82-83%.

PFY market failed to boom in Sep during the traditional peak season, and market players showed weakening confidence in demand after Sep.


Many downstream plants will suspend production for the National Day holiday, and the specific schedule is as following:

Holiday schedule of downstream plants in major weaving bases during the National Day holiday
Region Specific schedule
Changxing Current O/R is around 80-90%, and stocks are rising. 70-80% of water-jet plants and twisting units will have National Day holiday for 3-5 days
Wujiang O/R of water-jet units is below 70% now, which is reducing with high stocks. 50-60% of plants are expected to suspend production for 3-5 days during the National Day holiday
Changshu O/R of twisting units is around 80% now, and that of warp knitting units is around 70%. Domestic sales of grey fabric slightly improve, not good enough to support O/R apparently. O/R of twisting units may not change during the National Day holiday, and around 50% of warp knitting plants will stop production for 2-7 days
Xiaoshan and Shaoxing Current O/R of circular knitting plants and twisting units is 50-60% and 80% respectively. Limit circular knitting plants will shut down for holiday and twisting units are scheduled to maintain current O/R
Haining Current O/R of downstream plants is around 80%, and sales are moderate now. Around 10% of plants are scheduled to shut down for 1-3 days for holiday
Taicang Current O/R of twisting plants is around 80-90%, and around 10-20% of plants will suspend production for 2-3 days during the National Day holiday, but still needing further observation
Cixi Current O/R of twisting plants is around 70%, and around 30% of plants plan to shut down for 3-7 days during the National Day holiday

Generally, to alleviate inventory burden, operating rate of downstream twisting units and fabric mills is supposed to see periodical low during the National Day holiday, which is expected to be around 50-60% and 30-40% respectively, down by 20-30% and 30-40% respectively, and may recover after the National Day holiday. Compressively, the run rate of downstream plants is supposed to gain support for a short period after the National Day holiday. 
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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