Where is rayon yarn gone?

There are many voices of having a difficult time this year in the market. It seems that weaving mills are taking more holidays compared with past years, rayon yarn mills are controlling production or having conversion and traders dare not hoard up stocks. What are the changes in the production and circulation of rayon yarn? Let us take a brief look at the comparison of rayon yarn market in the first five months with the same period of 2021.

From the perspective of flow direction, the operating rate of both knitting and weaving mills in 2022 is falling year-on-year. Just looking at the figure of weaving mills, it averages at 48.66% in the first five months of 2022, which is 4.34 percentage points from the comparable 2021 level. In addition, the trading volume of yarn traders is reflected to be less than that of past years, based on a sample survey. The only gratifying thing is that the export has increased significantly. From January to May, the cumulative export of rayon single yarn and ply yarn is about 96kt, an increase of 31kt over the same period last year.

The spinners have also felt the pressure of production as the trend of accelerating production conversion since last year is still continuing, and there is also some initiative or passive reduction and shutdown in the first half of this year. Even so, the inventory burden of spinners has still increased this year.

In conclusion, the reduction of trading volume in weaving mills and traders is almost "offset" by production control and rising inventory of yarn mills, but the bearable burden by spinners is limited and coupled with the pressure of suffering losses from rising feedstock cost, it is obvious to see the difficulty of support.