Chemical Fiber Industry: Polyester Production Capacity Is Less Than &Nbsp; Khmer Price Promotes Prosperity.

This report begins with cotton From the angle of processing, the cost base of high cotton price is analyzed. Second, the replacement of polyester staple fiber to cotton will drive the price of polyester staple fiber to a new high. More importantly, we see that after 2009 Psf The growth of capacity is near zero growth. This is the result of the last round of the industry downturn. It also constitutes an important reason for the recovery of the industry. We maintain the industry's "recommended" investment rating.

Cotton prices rise, we propose Chemical fiber industry The three stage of investment theory: in the first stage, cotton prices began to rise, cotton production and seed enterprises took the lead in profits; in the second stage, cotton rose, polyester staple and viscose staple fibers were directly replaced by cotton, the demand increased, and the price difference of polyester staple fibers increased; however, the short staple of viscose staple fiber rose and did not lose to cotton, and the spread of price difference was limited. In the third stage, the cotton industry rose sharply and the whole industry of chemical fiber benefited. At present, cotton prices are still in the second stage, and we still push the polyester staple industry.

Domestic cotton prices have gone up to a new high and cost side has solid support: the formula for calculating cotton cost in the industry is cotton price = (purchase seed cotton cost - cottonseed cost) *2.7 processing fee (about 500 yuan / ton). At present, the average price of seed cotton purchase in the market is 10600 yuan / ton, and cottonseed price is 3600 yuan / ton, thus calculating cotton processing cost is 19238 yuan / ton, and cotton price has solid cost support.

The demand for polyester staple fiber has increased steadily, and the demand for cotton instead of cotton has increased. Since 2007, PET staple fiber has been at the bottom of the cycle, and the new capacity has been less in the past two years. Over the past nine years, the compound growth rate of PET staple fiber has been around 12%, which basically reflects the natural growth of downstream demand. Cotton, viscose staple fiber and polyester staple are the three major raw materials for cotton spinning, which can be replaced by each other. The high price of cotton will increase the usage of the remaining two. We estimate that the replacement ratio of PET staple will increase by 1% or 3.6% or so. From the perspective of new capacity, the price difference of PET staple has been 1000-1300 yuan / ton from 2004 to 2009, and the processing cost of 1100 yuan / ton has been deducted. The low profit level resulted in a total of 160 thousand tons of polyester staple fiber in the new polyester production capacity since 2009.

The starting rate of polyester fiber goes all the way, and the price difference of polyester staple has reached a new high of 03 years. In January, the output of polyester fiber was about 1 million 300 thousand tons in 09 years, while the output in August of 10 years was 2 million 250 thousand tons, and the output of single month reached a record high. It can be seen that the starting rate of polyester filament and polyester staple is at a higher position. With cotton prices driving, polyester staple fiber rose rapidly from 9600 yuan / ton to 13100 yuan / ton in one month. At present, the difference between cotton and polyester staple fiber has reached 8600 yuan / ton, which is also a high point that has never been seen in 03 years. We believe that there will be room for further increase in the following polyester staple to reduce the difference between cotton and cotton. Looking back at the previous cotton price cycle high (03/04), PET staple spreads also reached a peak in the same period. In the near future, as cotton prices continue to hit new heights, the single month spreads of PET staple have risen from 582 yuan / tonne at the beginning of the year to 3795 yuan / ton in the latest month, which has reached a 03 year high.

Continuous expansion of raw material production capacity, upstream cost pressure is not large. In the past 09 years, the PTA industry continued to enjoy a good profit level, attracting a large number of new or expanded production capacity. Statistics show that the new PTA capacity in 2010 and beyond will exceed 14 million tons, of which 4 million tons will be put into operation next year, and the output of polyester will be less than 3 million tons (consumption of PTA255 million tons) during the same period, while the import dependence of ethylene glycol in China will reach 77%. Raw material cost pressure is not large.

Risk warning: cotton prices fell sharply, PTA and ethylene glycol and other raw material prices rose considerably.