The operating rate of the polyester industry in May remained high, and the overall market trading atmosphere was good. In addition, the industry inventory is still at a reasonable position. This year’s off-season seems to be coming later! However, industry profits for polyester-related products shrank sharply this month. At the end of the month, international crude oil plummeted and the raw material PTA market plummeted. Is the off-season for the polyester market really coming?
During the May Day holiday, polyester factory inventories increased, so polyester factories in early May were mostly active in shipping. However, the raw material PTA fluctuated, the cost support was average, and the downstream pre-stocking was sufficient, so they were cautious in continuing to pick up goods, so polyester Production and sales in the ester market continue to be sluggish, and factories have to increase preferential promotions, resulting in a steady decline in the focus of transactions in the polyester market, which ultimately affects the shrinking profits of the polyester market industry.
Figure 1 Profit comparison chart of related products in the polyester industry from 2016 to 2017
In mid-May, international oil prices rose sharply, and black commodity futures rebounded sharply, driving the polyester raw material market to rebound significantly. The PX market price continued to rise, the PTA market fluctuated strongly, and the ethylene glycol electronic market also closed at the daily limit many times, and the cost end There is strong support for the polyester market. In addition, the operating rate of the polyester market is stable, and industry inventories are at a reasonably low level. Therefore, polyester factories are actively pushing up prices, and downstream are stocking up appropriately. The polyester market is rising significantly. However, this round of polyester raw materials has risen too fast, and the polyester market has lagged behind, resulting in a significant increase in cost pressure. Therefore, the industry profits of polyester-related products have shrunk significantly. Among them, polyester PET-related products suffered serious losses, while the polyester and polyester industry had acceptable profitability. Towards the end of the month, the market was disappointed that OPEC did not expand the scale of production cuts. International crude oil plummeted, the raw material PTA market fell sharply, cost support collapsed, and the polyester market became increasingly bearish. However, factories did not immediately follow the decline in the raw material PTA market. Therefore, the industry Profits have rebounded, but what ultimately needs to be concerned about is whether downstream manufacturers will pay for high-priced raw materials. Whether the inventory of the polyester industry, which is maintained at a reasonable position, will continue to rise after the Dragon Boat Festival and drag the polyester market into a downward channel. !
The off-season market in June doesn’t seem that scary. The polyester market has a high industry concentration. The total production capacity of the top ten polyester factories is 23.56 million tons, accounting for about 48% of the total polyester production capacity. Moreover, the new production capacity in recent years has been mainly concentrated in Xinfengming and Tongkun. , Shenghong, Rongsheng and other major polyester manufacturers. At the same time, industry self-control in the polyester market is relatively ideal. After experiencing high operating rates in the first and second quarters, the supply and demand pattern of the polyester market is still relatively stable. At present, the inventory of the polyester industry is at a reasonable position, and terminal weaving has not yet entered the off-season. Demand The outlook is not pessimistic. Judging from the shipment and production situation, the Shengze fabric market has not yet clearly felt the arrival of the off-season; the start-up of weaving factories and texturing factories has been relatively stable, maintaining at 70-80%, and manufacturers have many orders on hand to execute.
Figure 2 Comparison of loom operating rates in Jiangsu and Zhejiang from 2016 to 2017
The polyester market in May showed strong sales. According to statistics from Jin Lianchuang, the average monthly production and sales of polyester filament was around 116%; while the average monthly production and sales of polyester staple fiber was around 70%. At the end of the month, the raw material PTA market fell sharply. It did not trigger a panic decline in the polyester market. The polyester market showed a trend of stability and slight movements. After the holiday, raw material PTA is affected by the trend of international crude oil and commodity fluctuations, and may maintain a weak and volatile trend. However, the supply and demand side of PTA itself is relatively stable. If there are no major fluctuations in funds, the room for raw material PTA to explore may be limited. Cost support is insufficient, and downstream demand will slowly decline. However, whether the polyester market is based on its habitual relatively lagging price change pattern, or the flexible operation of adjusting market supply by lowering operating rates, increasing prices, and accumulating inventory in an appropriate amount, short-term The domestic polyester market has limited room for decline, and industry profits are expected to be maintained.
This year’s polyester market is not stimulated by favorable factors such as a wave of large-scale equipment maintenance. Each factory pays more attention to specific operations at the market level, not only formulating reasonable raw material procurement plans, but also formulating sales strategies more carefully. I believe that behind the national overcapacity reduction strategy are more competitive companies that will slowly rise in the transformation of the industry!
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