Small and medium spinners cut or suspend production at a large scale mainly due to the decline of overall demand

Small and medium spinners cut or suspend production at a large scale mainly due to the decline of overall demand. A large amount of cargos encounter poor sales and high inventory results in rising pressure on cash flow. Adding the volatile raw material, the spinners which cannot bear high risks will suffer. It is partly seen in Shandong, Hebei, Jiangsu and Zhejiang. Looking the operating rate, it recovered much after a short decline in Jun, but moved down quickly in Jul and recorded low since 2016. It is partly due to high-temperature and electricity restriction in North China, but more is due to the negative market.

Weaving sector also stays in cold territory. The operating rate remains sluggish and the impacts of weak demand pass into upstream continuously. For spinners, the large-scale production cut and unprecedented price competition are about to appear this year. Some capacity may be eliminated gradually.