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Chinese downstream mills affected

Of Chinese downstream mills, all dyeing mills in Wujiang were shut down from June 26 as well as 80,000 water-jet looms in Jiashan.

Operating rate in Changshu seems at high level while the actual sales look anything but good. In fact, the market still stays in the slack season. Fabric inventory is relatively high on the whole or only transferred to fabric traders from warp knitting plants. Currently the fabric is sold on credit. Actually inventory of warp knitting plants is also mounting. Traditional peak season is predicted to start in August.

The feedstock inventory will be properly controlled with the expected impacts of environmental remediation.

Sales of oxford made of DTY improved in early June but turned slack again in late June. Inventory keeps low now but will accumulate gradually later. Dyeing mills with fabric made of DTY in Zhejiang operate at intervals, with adequate fabric and yet few orders. With theoretical slack season in July-September, replenishment is inactive.

As feedstock procurement is finished and remediation on environment is implemented further, sales of the mills may be affected. The market sentiment may change around mid-July. PFY plants may provide discounts in case of decreasing sales and accumulated inventory amid current good book profits.

 
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