Nylon plants' holiday and resumption plans for Spring Festival

Considering that nylon enterprises in the middle and lower reaches mostly will shut or cut production for the Spring Festival holiday, CCFGroup count the shutdown and resumption time of part of nylon middle and downstream enterprises, combined with the situation of stock and refund before the Spring Festival, and evaluate the general situation of plants’ resumption of production after the Spring Festival.

Many nylon enterprises' holiday plan for the Spring Festival in 2023 is earlier than in previous years, considering the lack of orders before the Spring Festival, and workers' earlier leaving for holiday under wide spread pandemic in China after its adjustment on prevention policy.

Despite of an earlier leave, the plan to resuming production is relatively optimistic. Considering the possible another peaking of positive cases for COVID during the Spring Festival, the factories still hope to resume production no later than previous years, looking forward to a good start in the year of the Rabbit.

Nylon downstream plants' shutdown plan for the Spring Festival

Note: The statistical objects are 40 medium-small-sized nylon filament, yarn and modified plastic factories.

Most plants' shutdown is intensive around Jan 1 or Jan 14 (the 23rd of La Yue, also called "Little (Chinese) New Year," symbolizing the start of the Spring Festival), and a small number of plants would shut around Jan 16 (the 25rd of La Yue).

 According to the condition in November and December 2022, many plants have not taken enough orders, and their high inventory forced them to cut production. In addition, affected by peaking number of COVID cases in end-Dec, many workers have returned to their hometown in advance, therefore, some plants have no enough workers and have to shut earlier.

Nylon downstream plants' resuming plan after the Spring Festival

Note: The statistical objects are 40 medium-small-sized nylon filament, yarn and modified plastic factories.

Most surveyed enterprises plan to return to work before February 1, which has not changed much compared with previous years. Due to the earlier holiday this year, more companies hope to return to work and production earlier.

A small number of plants have yet to determine when to return to work, or plan to resume after Feb 5 (the 15th of the first month of the lunar calendar). First, they have worried about the possible rising number of COVID cases during the Spring Festival, thus workers may not return to work on time. The more important reason is that the pre-holiday order taking has been poor, so they are pessimistic about the post-holiday market. Insufficient firm orders or high inventory both lead to unclear resumption plan of factories after the Spring Festival.

Feedstock preparation and refunding problem

Before and after New Year's Day is basically the peak of raw material replenishment. However, during the price increase path of CPL- chip-filament, price increase is significantly higher than in the upstream that of the downstream, indicating that the speculation atmosphere is higher than the actual stock. Downstream factories are not willing to restock the higher-priced raw materials, and the actual quantity of stock is lower than that of previous years.

In addition, the problem of refunding this year is more prominent, and the more downstream, the more difficult it is. This has led to a shortage of cash flow in the factory, which in turn affects the feedstock preparation. According to the survey, plants who have confirmed plan to replenish feedstock have prepared 15-30 days of feedstock, and a few only have 5-10 days (based on their daily production need). But since the downstream industries are relatively scattered, and there are significant differences among different enterprises, it is only for reference.