According to the Futong Financial App, Haitong Securities released a research report stating that since the third quarter of 2024, the loom and weaving starting rates have decreased, and the trading volume of Zhejiang China Light & Textile Industrial City Group (600790.SH) has remained stable and increased. Weaving enterprises mainly focus on purchasing for immediate needs. The polyester filament enterprises have maintained a stable production and sales rate, with a decrease in the starting rate and continuous destocking, resulting in improved profitability. As of August 23, 2024, the polyester filament price difference is at the 73rd percentile since 2020, and the PTA price difference is at the 23rd percentile since 2020. Haitong Securities predicts that with the approach of the traditional peak season in September and October, downstream demand is expected to continue to improve, and the polyester filament price difference is expected to further recover.

Since the third quarter, the starting rates of looms and weaving have decreased. According to Zhuochuang Information, the starting rates of looms and weaving have gradually decreased since the third quarter. As of August 16, the loom starting rate in Jiangsu and Zhejiang was 63.10%, a decrease of 4.6 percentage points from the beginning of the third quarter and a decrease of 3.5 percentage points from the same period in 2023. As of August 15, the weaving starting rate was approximately 62.03%, a decrease of 5.3 percentage points from the beginning of the third quarter.

The trading volume of Zhejiang China Light & Textile Industrial City Group has remained stable and increased. As an indicator of the textile market, the trading volume of Zhejiang China Light & Textile Industrial City Group has increased slightly after the holiday. According to Baichuan Yingfu, from July 1 to August 21, the total trading volume of Zhejiang China Light & Textile Industrial City Group increased from 6.22 million meters to 6.5 million meters. Among them, the trading volume of filament fabrics increased from 4.78 million meters to 5.08 million meters, while the trading volume of staple fiber fabrics decreased from 1.44 million meters to 1.42 million meters.

Weaving end: a slight decrease in order days, and relatively stable raw material inventory. According to Baichuan Yingfu, as of August 15, the average order days for weaving manufacturers is 10.37 days, a slight decrease of 0.88 days compared to the beginning of the third quarter. The market's transaction volume is currently stable, and weaving manufacturers' orders have decreased slightly. Due to the concentration of new orders, the demand for raw material replenishment by weaving enterprises is relatively weak, and raw material inventory remains stable at 10-11 days.

Polyester filament: stable production and sales rate, decreased starting rate. Since the third quarter, the production and sales rate of polyester filament has remained around 40%. However, the starting rate of polyester filament enterprises has continued to decrease, from 85.77% at the beginning of the third quarter to 83.42% as of August 16. The destocking of polyester filament inventory continues. According to Baichuan Yingfu, from July 5 to August 16, the inventory of polyester filament factories decreased from 2.7703 million tons to 1.6521 million tons.

The polyester filament price difference is expected to further recover. As of August 23, 2024, the polyester filament price difference is at the 73rd percentile since 2020, and the PTA price difference is at the 23rd percentile since 2020. Haitong Securities predicts that with the approach of the traditional peak season in September and October, downstream demand is expected to further improve, and the polyester filament price difference is expected to further recover.

Investment recommendation. Continuous destocking of filament inventory, Haitong Securities expects downstream demand to further improve with the approach of the traditional peak season in September and October.

Risk warning: Slow recovery of downstream demand; Significant increase in raw material prices; Increase in supply pressure due to the increase in production capacity of filament yarn, etc.