After the spring festival in China got over, the impact of coronavirus disease (COVID-19) was significantly observed in the polyester market, whose business has remained poor since. Most of the players of the polyester market have not been functioning well from the last few weeks. The transactions have been very less and not significant due to plunging polyester cost and oil prices and mounting inventory burden.
The companies which were open before the Spring Festival or those that cut the production in a small scale, have stocks for approximately 20-30 days; higher in Polyester drawn textured yarn (DTY) plants. The companies which were closed before the Lunar New Year holiday or cut production on a large scale, have stocks for approximately 10 days. The spread of novel coronavirus restricted logistics and slowed recovery of downstream market; as a result, inventory of the finished goods in polyester companies kept on increasing and is expected to touch a record high. Most of the polyester units have cut down production from end of January and early February with huge inventory burden.
The operating rates have been decreasing due to delay in the restart of polyester units and more production cut. Even though some workers have resumed work, they must remain isolated which will impact the progress of the production units.
Major companies are facing difficulty in restarting the production process due to high inventory burden, slow recovery of downstream plants, constrained logistics, shortage of accessories (packaging materials like paper tube/carton/cystosepiment/wood pallet) and falling oil prices. The consumption of textiles and apparels have been severely affected due to this epidemic which first appeared during the Spring Festival. The consumption rate of apparel in last winter and spring remained stunted. It may now impact the order management of summer wear.