The reshuffle period for small DTY companies arrives

Previously, texturing machines were jokingly called "money-making machines." As long as one had the capital, entering the texturing industry was a way to make money grow.

Although texturing equipment is expensive, it has the advantages of relatively high automation and stable production of a single product all year round. Therefore, as long as there is money, one can rent a factory, buy several texturing machines, prepare working capital for raw material procurement, hire a number of workers and train them, and then the texturing enterprise can start operating. On the premise of ensuring stable production and quality, one could make steady profits just from texturing processing fees. If one could occasionally seize a few upward trends in raw material procurement, the benefits would be more substantial. While ordinary people were keen on investing in real estate, texturing bosses were more willing to invest in texturing machines.

Although with the expansion of the industry and intensified competition, the benefits of DTY plants have been declining year by year, from high profits to meager profits, it still couldn't resist enterprises' enthusiasm for adding texturing equipment. In recent years, there has even been a new wave of adding texturing equipment. However, the purpose of adding texturing equipment has shifted from making money from processing fees to making money from supporting services, and the main players have shifted from small-scale texturing enterprises to upstream polyester enterprises and downstream fabric mills.

The new wave of adding texturing equipment has also led texturing equipment suppliers to compete for market share. Especially against the backdrop of the country encouraging large-scale equipment renewal and domestic equipment, new domestic texturing machine suppliers are constantly emerging. Even some enterprises that originally made textile machinery have begun to get involved in texturing equipment, wanting to get a share of the texturing market. The investment cost of texturing machines has further decreased, and production energy consumption has also improved. Even some large enterprises are trying to use domestic texturing equipment to produce conventional products, and enterprises have more options for texturing machine equipment.

Nowadays, the good time of texturing is gradually ending, especially after the epidemic, the reshuffle period for small-scale DTY plants has arrived. The operating rate of the DTY industry is gradually declining and showing obvious differentiation. DTY enterprises with upstream and downstream supporting facilities have a higher operating rate, while the operating rate of small DTY enterprises only with texturing production has significantly decreased, and some even gradually withdraw from the market.

First of all, in recent years, as downstream fabric mills continue to equip themselves with upstream texturing equipment, the stock of downstream customer resources of DTY plants is shrinking. At the same time, large enterprises with polyester spinning supporting DTY, under the pressure of new texturing capacity, use cost advantages to lower prices to seize downstream customer resources from small-scale texturing enterprises, which further compresses the processing spread of DTY production. Small-scale texturing enterprises not only lose customers, but also their texturing processing spread has been compressed from meager profits to near break-even or even losses. The days of making money from texturing fees are gone forever, and the pressure to survive has significantly increased.

Secondly, the capacity concentration of leading PFY enterprises has been continuously improving, especially the three major factories, whose POY external sales account for most of the market share, and their discourse power on POY prices has significantly increased. At the same time, as the growth rate of POY capacity has slowed down since 2024, while DTY capacity is still expanding, the situation of texturing processing spread being squeezed by upstream POY will become normal.

In addition, there are more external unpredictable factors such as geopolitical situations and trade wars, making it increasingly difficult to grasp the market trends of raw material procurement. At the same time, the entry of the supply chain and the guidance of small essays from leading enterprises have synchronized the frequency of downstream procurement, narrowed the price gap in raw material stocking among enterprises, and indirectly intensified the internal competition among downstream DTY peers.