In the first half of 2021, my country’s economy has continued to recover steadily, the domestic demand market for textile and clothing has improved significantly, and international market demand has also picked up. The continued rise in international oil prices has provided strong cost support for the chemical fiber industry. The overall economic performance of the chemical fiber industry remains good, with major operating indicators rebounding rapidly. Looking forward to the whole year, the operation of the chemical fiber industry will still face many tests. The industry needs to accelerate high-quality development and make a good start for the “14th Five-Year Plan”.
01 Production maintains steady growth
In the first half of the year, the overall operating load of the chemical fiber industry was higher than that of the same period in 2020 The obvious improvement is due to the low base in the same period in 2020, but it is also at a high level compared with the same period in recent years. According to data from the National Bureau of Statistics, from January to June, chemical fiber output was 33.37 million tons, a year-on-year increase of 17.12%. In order to avoid misjudgment of the industry’s operating situation due to high growth due to the low base in 2020, we used the first half of 2019 as the base period and calculated using the geometric mean method (the same below). The two-year average growth rate of chemical fiber output was 9.10%.
On a monthly basis, with the rapid resumption of work and production in the industry after the Spring Festival last year, the base of chemical fiber production increased rapidly, causing the year-on-year growth rate of output from January to June this year to fall month by month (Figure 1).
Figure 1 Year-on-year growth rate changes of chemical fiber production in 2021
02 Cost support is obvious
2021 Since then, the commodity market has continued to strengthen against the background of demand recovery and inflation expectations. At the same time, OPEC, the Organization of Petroleum Exporting Countries, continues to implement production cuts and strictly controls crude oil supply. Therefore, international oil prices continued to rise from January to June, with WTI crude oil prices rising from around US$50/barrel at the beginning of the year to exceeding US$70/barrel in June, exceeding the oil price level before the COVID-19 outbreak (Figure 2).
Figure 2 2020-2021 WTI oil price trend
Affected by the rise in crude oil prices, the cost of chemical fiber has continued to rise, and the chemical fiber market price has increased from January to June. obvious. According to data from China Fiber Network, the prices of main chemical fiber products at the end of June increased to varying degrees compared with the beginning of the year. However, comparing the price increases of products in various links of the industrial chain, it can be seen that the price increases of chemical fiber products are generally smaller than the increases of their main raw materials and crude oil (Table 1). Therefore, it can be judged that the chemical fiber market from January to June was a cost-driven increase.
Table 1 Price changes of main chemical fiber products and raw materials in the first half of the year
In terms of products, polyester, nylon and viscose staple fiber The prices of the three most important categories of products were significantly different in the first and second quarters. In the first quarter, under the influence of various factors such as the rise in crude oil, the release of liquidity, and the increase in speculative demand, the prices rose significantly. Most products were sold at the end of February or early March. It reached the highest point in the first half of the year; it continued to decline in the second quarter, and factories frequently promoted shipments. Taking polyester filament POY as an example, inventory increased in the second quarter compared with the fourth quarter of 2020 and the first quarter of this year, which put a certain amount of pressure on working capital.
The price increase of spandex products is relatively obvious. From the cost side, it is due to the sharp increase in raw material costs. The upstream raw material of PTMEG, the main raw material of spandex, is BDO, but PTMEG is not the only downstream of BDO. Another application field of BDO, PBAT (a degradable material), is in the “limited market”. The increase in demand under the favorable policy of “Plastic Order” has caused the price of BDO to skyrocket. As the second largest downstream of BDO, PTMEG is supported by the cost side to increase the price, which in turn drives the price of spandex to rise. From the perspective of product innovation, with the technological progress and product development diversification of the spandex industry, the differentiation and high quality of spandex can fully meet the needs of domestic and international markets. Its application scenarios and usage have increased significantly. Spandex has changed from the dominant position in textile products to “MSG” became a major ingredient.
03 Chemical fiber exports increased significantly
As global trade demand gradually recovers, the export volume of chemical fiber products increased significantly from January to June. On the one hand, this is due to the low base effect in the same period last year. On the other hand, international market demand has indeed increased. The epidemic situation in Southeast Asian countries such as India, Vietnam, and Myanmar is out of control, and some orders have returned to China. According to China Customs statistics, from January to June, the export volume of major chemical fiber varieties such as polyester filament, polyester staple fiber, nylon filament, spandex and other products increased significantly year-on-year, and exceeded the data for the same period in 2019 before the epidemic (Table 2).
Table 2 Statistics on export volume of major chemical fiber products
04 The terminal market has recovered steadily
Since 2021 , my country’s national economy has stabilized and improved, driving the domestic demand market for textiles and clothing to recover steadily. According to data from the National Bureau of Statistics, from January to June, the national sales of clothing, shoes, hats, and knitted textiles above designated size increased by 33.7% year-on-year, with an average growth of 3.7% in two years; the national online retail sales of clothing products increased by 24.1% year-on-year, and the growth rate was higher than the same period last year. In the same period in 2020, it increased by 27 percentage points, with an average growth of 9.8% in the two years.
In terms of exports, China Customs Express data shows that my country’s total exports of textiles and clothing from January to June were US$140.09 billion, a year-on-year increase of 12.1%, and an average growth of 6.2% in the two years. Among them, the clothing export situation remained stable.�� has improved, with the cumulative export value from January to June reaching US$71.53 billion, a significant year-on-year increase of 40.3%, and an average growth of 4.4% in the two years. The proportion of total textile and apparel exports increased from 40.8% in the same period in 2020 to 51.1%; textile exports The amount shrunk as demand for foreign anti-epidemic materials decreased. The cumulative export amount from January to June was US$68.56 billion, a year-on-year decrease of 7.4%, and an average growth of 8.1% in the two years.
05 Economic benefits continue to grow
In the first half of the year, the overall economic benefits of the chemical fiber industry increased significantly compared with the same period in 2020, while the second quarter declined compared with the first quarter.
In recent years, the supply-side structural reform of the chemical fiber industry has achieved remarkable results. Backward production capacity has been gradually eliminated, new production capacity has been effectively controlled, the growth rate of production capacity has slowed down significantly, and the supply and demand pattern of the industry has improved. This is also the reason why the chemical fiber industry The fundamental reason for rapid recovery and substantial growth in benefits. In addition, raw material and product prices continue to rise, and excess inventory also contributes a certain amount of profits to the company.
According to data from the National Bureau of Statistics, from January to June, the chemical fiber industry achieved operating income of 476.012 billion yuan, a year-on-year increase of 35.05%, and the two-year average growth rate was 5.37%; the total profit was 32.658 billion yuan, a year-on-year increase of 387.77% , the two-year average growth rate was 56.44%; the operating income profit margin was 6.86%, an increase of 4.96 percentage points year-on-year, and an increase of 3.75 percentage points compared with the same period in 2019; the industry loss was 22.00%, narrowing 20.75 percentage points year-on-year, and 3.75 percentage points higher than the same period in 2019. narrowed by 4.52 percentage points; the loss of loss-making enterprises was 2.711 billion yuan, a year-on-year decrease of 60.42%, and an average decrease of 12.77% in the two years.
06 Fixed asset investment resumes growth
According to data from the National Bureau of Statistics, from January to June, the actual fixed asset investment in the chemical fiber industry increased by 16.6% year-on-year. Most of the new production capacity is still concentrated in leading enterprises, and their scale advantages have been further consolidated. With the gradual launch of new production capacity, the contradiction between supply and demand in the industry will appear in stages. However, disorderly competition has been significantly reversed, and industry self-discipline has been significantly improved.
Outlook
Looking forward to the second half of the year, affected by the trend of international oil prices and the epidemic, The volatility of the chemical fiber market may increase due to uncertain factors such as recurrence, the direction of monetary policy, and whether return orders can be sustained. Due to concerns about the intensity of production cuts under high oil prices and concerns about downstream demand, oil prices have experienced significant fluctuations in July, and subsequent upward pressure will increase. However, it is expected that there will still be support for the cost end of chemical fiber. The recurrence of epidemics at home and abroad will still have a greater impact on terminal consumption and the shipping market, and also increase the uncertainty of the recovery of the terminal market. In the second half of the year, the commissioning of new chemical fiber equipment will continue to increase pressure on the downstream market. It is expected that in the third quarter, under the traditional peak season expectations, the chemical fiber industry will still maintain a good operating trend, but the risk of a decline in the fourth quarter will be greater. It is expected that operating indicators such as chemical fiber output, exports, and economic benefits throughout the year will still be significantly better than in 2020. However, due to the low base in the first half of 2020 and continued recovery in the second half of the year, the growth rate of various industry indicators in 2021 will be obvious. The trend is high before and then low. </p
