We believe that from now to the end of 2021, polyester commodities will be mainly bought at bargain prices. The reasons are as follows: First, the cost support of polyester commodities is still strong, and crude oil and coal prices are difficult to trend. Weak; secondly, the overall supply is controllable, MEG will undergo large-scale maintenance in the second half of the year, and PTA’s new production capacity has been released this year, and the absolute value of the inventory of both has dropped significantly year-on-year; thirdly, the Golden Nine and Silver Ten are the traditional peak consumption seasons. Higher sea freight has weakened the enthusiasm of Europe and the United States to restock, and domestic demand can still be expected.
01 Cost support is strong, supply increase is limited
Crude oil is currently It fell into a sideways trend, and the upward and downward drivers were not strong. The epidemic broke out in China in early August. Many places in China advocated people not to travel unless necessary. More medium and high-risk areas were implemented in closed management. Traffic congestion duration in eight large cities, including Nanjing, Zhengzhou, and Changsha, all dropped sharply. China’s Air flight volume also plummeted by more than 30% in a short period of time. Oil prices fell slightly as a result. In mid-August, my country’s new cases and medium- and high-risk areas both turned around. The impact of the epidemic has gradually faded away, and the probability of a weakening oil price trend is already very low. my country’s coal prices have temporarily fallen due to the negative impact of supply guarantees and the off-season demand. Considering my country’s mid- and long-term plans for carbon peaking and carbon neutrality, as well as the support of low inventories, the probability of coal’s trend weakening is not high. Coal prices will change later. It may maintain a wide range of fluctuations in a range.
So far in 2021, both PTA and MEG have experienced large-scale capacity expansion, with year-on-year capacity growth rates of 16% and 26% respectively. Despite such a large-scale expansion of production capacity, the corresponding inventories of the two varieties have not accumulated much. The main reason behind this is that lower processing fees have limited the factory’s production enthusiasm. In the next few months of 2021, PTA’s social inventory and warehouse receipts will be lower than in the first half of the year, and PTA will not add new production capacity. Mainstream PTA factories will have greater enthusiasm and initiative to control the flow of supply in the market. MEG still plans to launch new production capacity. However, there will be a maintenance peak for overseas equipment in August and a maintenance peak for domestic coal chemical companies from September to December. The possibility of substantial accumulation of EG inventory is also relatively low.
02 The seasonal peak season of demand is coming
The terminal of polyester is textile clothing. Textile clothing has a very strong seasonal pattern. Sales volume in the second half of the year Usually higher than in the first half of the year. Judging from the absolute value trend of domestic retail sales of clothing, shoes and hats in my country, June and July are the seasonal lows of seasonal retail sales. August and July are basically the same, and they gradually rise from September to December. From 2011 to This pattern will appear throughout the ten years of 2020. We believe 2021 will be no different. Judging from the actual situation, there are consumption peaks on Double Eleven and Double Twelve every year in China, and there is a consumption frenzy during Christmas and New Year overseas.
The domestic consumption peak in the second half of the year will still come. Overseas, there is a certain degree of uncertainty. Compared with 2020, Europe and the United States have higher vaccination rates in 2021, and their consumption enthusiasm is also higher. We tracked the data and found that the inventory-to-sales ratio of U.S. apparel wholesalers is currently at its lowest value in 12 years since 2010, and wholesalers will have a need to replenish their inventory. The biggest uncertainty behind this is sea freight. The epidemic has affected the efficiency of container transshipment, with shipping capacity declining sharply and freight rising sharply. Freight is currently the biggest constraint on my country’s export growth. Although prices have risen, my country’s container throughput from January to June this year still increased by 15% year-on-year, and the cumulative increase compared with the same period in 2019 was 8.8%. Sea freight may reduce my country’s external demand to a certain extent. From another perspective, it may be the high demand for U.S. imports that has led to the current high sea freight.
Summary
In summary, We believe that the price of polyester raw materials will be supported in the next three and four quarters. At the same time, demand will also be a seasonal peak season during this period. Investors should not be too pessimistic. If sea freight can be alleviated, polyester raw materials may still be as high as before. From an absolute price point of view, we believe that MEG and PTA can test long between 4800-5000 points. </p
