Maintained operating rate and stood on the sidelines

Spinners generally chose production cut or suspension as a last resort, and would only suspend production during the Spring Festival except for force majeure such as the pandemic and “double control”. However, this year, production cut and suspension were frequently seen due to the poor profits and high inventory, and the lowest operating rate even dropped to less than 50% in July and August. More than half of the yarn mills suspended production during the National Day holiday. So far, the operating rate of polyester yarn pegged at 58%, down 10percentage points from the first quarter. Spinners were divided over whether to further cut production or not. Most of them tended to keep waiting due to the hope that sales could turn better as the weather turned cold and the "double 11" shopping festival approached. Besides, parts of textile mills were still shut, and things could turn better as they resumed production. What’s more, yarn mills expected to deplete as much inventory as possible given the current appreciation of stocks. Yan mills that were mainly engaged in export business chose to continue production until the inventory was full.