The market for nylon textile filament remained distressed in July 2020 as raw materials prices declined and demand in a traditional off-season contracted. As CCF Group reports, demand for nylon textile filament began to wane in mid-June with the situation worsening in July. Sales/production ratio of NFY plants declined to 50-70 per cent with very few mills achieving 80 or higher production. This led to rising NFY inventory through day on day to over 30 days by July 23.
From April to June, fabric mills maintained production levels on account of expected rise in feedstock market and recovery of exports. However, since domestic demand in China gradually entered the off-season, their expectations were not fulfilled, and their inventories had risen to 1.5 months or more. Huge inventory pressure led to a collapse in market prices and dumping of stocks at profit-losing rates.
The fall in prices of nylon raw materials sharply aggravated the pessimism of fabric mills which preferred to cut their feedstock consumption rather reducing production.