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Insight | Time: Aug 8 2022 4:01PM  Editor:Tina Kong
Chemical fiber industry hit by summer power rationing again
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Affected by the subtropical high, Jiangsu and Zhejiang witness heat warnings again. A number of DTY and fabric production bases are expected to see high temperature at 38-41°C in the following 7 days.

Last Saturday, the Development and Reform Commission of Zhejiang Province issued a letter on agreeing to start C-level orderly power consumption, which mentioned: with the consent of the provincial government, Zhejiang Province would launch the C-level 12.5 million kilowatt orderly power consumption measure on Aug 8 according to the actual situation of the power gap, and it will adjust the orderly power consumption grade as appropriate on Aug 9.

Policy of orderly electricity consumption in some textile bases in Jiangsu and Zhejiang
Region Policies
Taicang Divided into two batches. Running for 5 days and suspending production for 5 days. The first batch is from 8:00 to 24: 00 on Aug 8.
Changxing Plants in Jiapu suspend production by batches from Aug 11 to Aug 14. Hongqingqiao Town and Hongqiao will suspend production on Aug 8-10.
Shaoxing Some reduce run rate to 50% and some have not received notice. Ma'an District suspend production for one day.
Xiaoshan Polyester enterprises and PET fiber chip producers are continuous enterprises and others are uncontinuous companies. Continuous enterprises need to control run rate at 30% and uncontinuous companies are required to restrict operating rate at 10%. Some plants suspend production for one day, some slash run rate to 60-70% and some are waiting for the specific notice.
Cixi The power consumption of some areas of Baisha round machine line B868 is restricted on Aug 8. Affected by this, Textile City C Area (excluding living district) and garment center both have power rationing from 7: 00 to 22: 30 on Aug 8. Plants in Qiaotou Town require to run at 50% of capacity.
Haining Enterprises do a good job in resources thorough search of adjustable operation rate and the construction of minute level interruptible capacity building, while the actual implementation does not start temporarily.
Tongxiang Some enterprises will be restricted for one week. Controlling operating rate at below 50% from 7:00-23:00. Some companies in Chongfu and Shimen should run at 10% of capacity, equivalent to shut down for one day and adjust based on later notice.

Before the power rationing, the operating rate of PFY, NFY and spandex plants has been low due to weak demand and high inventory, which was at 63.4%, 68% and 52% respectively by last Friday.


Currently, the run rate of chemical fiber and textile industry was lowered affected by the power rationing. Supply side of fibers is not impacted by now, while demand  sector is directly affected.




Based on current estimate, the orderly electricity consumption will not last long, mainly 1-7 days. DTY market will be affected the most, followed by fabric manufacturing market and chip-spun field, and the polymerization sector will be the least impacted. The influence on demand side will be bigger than that on supply. However, some factories have not started controlling run rate by now although they have received notice. The operating rate is both expected to reduce further in short run in terms of supply and demand side.

[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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