Polyester/cotton yarn mills reported a slump

Polyester/cotton yarn mills reported a slump in their overall demand this year, partly owing to the surge in supply caused by previous production shift and partly due to the change in market sentiment owing to the trade war. As the CCF Group notes, after initial smooth sales and low inventory in end-2018, the sales of polyester/cotton yarn stagnated with its inventory averaging at 20 days or above.

Based on downstream plants, the sales in major producing areas are moving slowly with both domestic and foreign sales being under unprecedented pressure. For example, Henan, Shandong, Fujian, Jiangsu and Zhejiang are witnessing continuous high inventory pressure with many medium-sized enterprises cutting their productions largely. For example, the largest cotton yarn producing area, Shandong is highly burdened with unsold inventory this year as the demand has not improved even though the prices have been lowered. Other regions face the same issue more or less.