Downstream finished goods inventory pressure is high

Downstream finished goods inventory pressure is high, and the operating rate has gradually declined. Comparing the filament inventory in the previous five years (2017-2021), after June 2022, filament inventory has stayed above the historical highest level, only slightly lower in August, and then began to climb up gradually. In November, filament inventories are as high as about 40 days, more than ten days higher than the average rate of the same period of previous years. The high inventory of filament is mainly due to the obvious weakness of downstream demand, as grey fabric, textile and clothing are all under high inventory pressure. The operating rate of weaving mills in Jiangsu and Zhejiang in most of the time this year is significantly lower than the level of the same period in history, only briefly maintained a normal run rate in August-October, after November weaving mills start rate will rapidly decline. This year's market downturn has become a consensus, the Spring Festival will be slightly earlier than that in previous years, downstream factories will consider running at low rate to the end of the year or set off earlier for holiday. Some customers have said that the transaction may be ended earlier than the New Year's Day.