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Last week, a polyester factory production cut news touched the heart of the textile people. Including new Fengming, Tongkun, Hengyi and other head polyester factories prepared to jointly reduce production by more than 30%, is expected to reduce output will be more than 4 million tons. In the opinion of xiaobian, polyester manufacturers reduce production, mainly is the contradiction between high inventory of polyester enterprises and weak demand of downstream weaving enterprises, but also mixed with deeper reasons. Profits at the back end of the chain are being squeezed PTA price rise in the first half of the year is completely regardless of the downstream polyester industry affordability of the surreal rise. The domestic textile industry encountered unprecedented difficulties in the second quarter. The demand was depressed to the extreme while the cost soared. But PTA manufacturers can not take all the name, because the processing fee of the PTA industry in the second quarter has been reduced to -100 yuan per ton below. The rare negative processing fee means that PTA once fell into a loss in the whole industry. First, the geopolitical crisis in Ukraine has pushed crude oil prices high, making life difficult for all petrochemical industries. But PTA raw materials - naphtha and PX relatively better situation. Second, the United States imports a large number of aromatic hydrocarbons, such as naphtha, PX, toluene and other used in gasoline blending oil. This year, gasoline prices in the United States exceeded the historical extreme value of $5 a gallon, while hot weather and strong demand for gasoline adjustment this year severely hit the normal balance of aromatic hydrocarbon market. A large number of PX and toluene have been exported to North America, resulting in severe restrictions on the production of PTA and styrene and a sharp rise in costs. Although its three downstream polyester terminal factory orders decline affected by the operating rate is lower than in previous years, but the range is relatively small. The negative feedback of weak terminal demand did not further affect the upstream PTA, but the pressure of imbalance between supply and demand was borne by polyester factories. The supply of polyester is on the high side and the demand is down. The start-up of upstream and downstream does not match, leading to a surge in the pressure of polyester raw materials. In addition, the production and marketing performance of polyester is light, the average production and marketing is less than 50%, and the inventory of polyester products is increasing rapidly. It is understood that the downstream polyester industry has suffered the most serious inventory overstocking in recent years. The objective reason is that the domestic epidemic impact led to a decline in demand, but the fundamental process is the production capacity of polyester itself, the average operating rate of the industry is less than 50%. Under the imbalance of supply and demand, the inventory cycle of FDY, DTY and other varieties exceeds 30%, and the inventory cycle of POY is close to 30 days, which is far beyond the historical period. Similarly, the closer you get to the end, the more limited the price rise, and the profits at the back end of the chain are being squeezed. Polyester filament, staple fiber including weaving experienced nearly half a year of continuous losses.

In recent years, Vietnam's textile industry has developed rapidly. In 2018, Vietnam has become the world's third largest textile export country after China and India. However, in 2019, although Vietnam's textile exports increased, they were only $39 billion, which failed to reach the target of $40 billion that year. This year, due to the impact of the epidemic, Vietnam's textile industry continues to face problems, and it is estimated that the annual target of US $42.5 billion will not be achieved. At this time, Vietnam, which relies on Chinese raw materials, made unexpected moves in textile raw materials to China. Latest: 60% of Vietnam's textile raw materials relying on China launched an investigation. What's the situation? According to the recent decision No. 1079 / qd-bct issued by the Ministry of industry and trade of Vietnam, Vietnam will launch an investigation into some polyester long fiber (also known as filament yarn) as textile raw materials from China, India, Indonesia and Malaysia. The survey was mainly initiated by Vietnam's leading player in the industry. It is understood that although the industry leader accounts for 67.4% of Vietnam's total polyester long fiber output, it still competes with similar products from China, India and other countries. Therefore, the company hopes to reduce the competitive advantage from other markets such as China through investigation, and finally achieve the goal of developing in Vietnam. Although Vietnam can produce 350000 tons of filament yarn every year, its domestic demand is only 270000 tons, which can fully meet the domestic demand. However, Vietnam's products do not have much competitive advantage in the country, Vietnam has long relied on imports of polyester long fiber, and even increased its dependence on foreign countries year by year. According to the data of General Administration of Customs of Vietnam, the import volume of such products gradually increased from 154000 tons in 2017 to 185000 tons in 2019, with the highest dependence on China. According to Vietnam statistics, in 2019, China firmly occupies 60% of Vietnam's imported fabrics and 55% of the fiber market. The chairman of Vietnam textile and Garment Association (vitas) also revealed that Vietnam is very dependent on Chinese raw materials, saying that 55-60% of the raw and auxiliary materials of Vietnam's textile industry are supplied by China, especially the raw and auxiliary materials, yarn, cloth, etc. of clothing are mainly imported from China. Why is Vietnam investigating Chinese raw materials when Vietnam is so dependent on them? Vietnam's textile industry has been suffering from continuous problems: in February, there was concern about the shortage of raw materials in China, and in March, there was concern about the chargeback in Europe and the United States At this time, Vietnam launched the investigation of textile raw materials and auxiliary materials to China, mainly due to the continuous problems of the textile industry in Vietnam in recent months. Vietnam also hopes to take this opportunity to vigorously support its enterprises and reduce its dependence on raw materials from China and other countries, so as to avoid the dilemma in February. In the previous February, when China delayed the resumption of work, Vietnam's textile industry was faced with a serious shortage of textile raw and auxiliary materials. At that time, the chairman of Vietnam textile and Garment Association (vitas) even said that if Vietnam's textile industry could not import raw and auxiliary materials from China and other places by the end of March, many companies would have to declare shutdown in April. However, with China's successful control of the epidemic and the rising rate of return to work, by the end of February, China had restored most of its raw material supply, which greatly relieved Vietnam's urgent need. However, one wave is not flat, another wave is rising. In March, when supply was resumed in China, Vietnam finally didn't need to worry about the shortage of raw materials. Just as it was planning to speed up production, European and American enterprises, as the center of the global epidemic, came to Vietnam to refund their bills. According to the vice president of Vietnam textile and Garment Association (vitas), as the two largest markets for textile exports in Vietnam, customers from the European Union and the United States have repeatedly called back or delayed the payment. Due to the sharply reduced demand from the two major markets in Europe and the United States, Vietnam is expected to reduce its exports to the European Union by 8% in the first and second quarters of 2020. Many Vietnamese textile companies began to plan to reduce production lines, reduce wages and work hours to reduce costs, to deal with the possible large-scale chargeback phenomenon.