When Will PTA Monopoly Profits Break? Small And Medium-Sized Textile Enterprises Shed Blood With Chen!

Over the past year, due to the impact of Sino US relations, orders have been reduced and demand continues to slump, which has made many textile enterprises difficult to operate. However, despite the complexity of the external environment, many enterprises are still cling to their teeth and wait for the day when the clouds are coming. However, what is worse is that the recent surge in PTA has made many small and medium-sized textile enterprises unable to digest and almost become their last straw.


Recently, the editorial department of this journal has received several letters from a number of textile enterprises.

The object of the report is PTA Yisheng Petrochemical Company, which reported mainly on Yisheng Petrochemical's continuous utilization of production capacity, and by hoarding stock and using futures tools to manipulate the market and raise the spot price, disrupting the order of normal production and operation of the downstream polyester polyester industry and textile industry.

This is not the first time Yisheng Petrochemical has been reported.


In September 4, 2018, Yisheng Petrochemical was also reported as a real name because of monopolistic manipulation of PTA market prices. The content of the report is almost identical.


It is worth noting that the Department of reporting and admissibility in 2018 was the Beilun development and Reform Commission of Ningbo City, Zhejiang province. At that time, the Ningbo development and Reform Commission said that the content of the report exceeded its level of acceptance, and suggested that it should react or report to the provincial development and Reform Commission or the NDRC. And this year's report letters can be seen in the head of the securities and Futures Commission and the inspection department of Zhengshang.


However, Yisheng petrochemical, which has been repeatedly reported, has always maintained the way of "cold treatment" so as not to respond.


In fact, as early as Yisheng petrochemical company was reported in 2018, the media interviewed a professional lawyer. It said: "the nineteenth provision of the anti-monopoly law stipulates that the market share of the relevant market reaches 1/2, and the standard of market dominance is presumed." No matter whether the data of the two letters are true, it is true that their capacity has not reached the "1/2" stipulated in the anti-monopoly law.

Nevertheless, PTA's profiteering and its fluctuating market trend are facts.

Li Zhoulei, an analyst at Galaxy futures PTA, told reporters: "in the upstream and downstream links of the entire PTA industry chain, PTA monopolizes the vast majority of its profits." Li Zhoulei said: "in the past June, the price of domestic polyester raw materials has gone out of the bottom of the market as a whole. However, the trend of PTA is obviously stronger than that of MEG. The main contract 1909 has risen nearly 20% in the month, and has returned to the vicinity of the 6000 yuan / ton integer pass. As far as PTA is concerned, the price difference between PX and naphtha for most of this month is near the reasonable level of 350 US dollars / ton, which is also the price difference that can ensure the normal operation of PX production enterprises. However, the difference is that the spot processing fee of PTA has been at a high level, and it has dropped to a minimum of 1000 yuan / ton in the month, and then rose to a high level of nearly 2000 yuan / ton at the end of the month.


PTA is one of the most important bulk organic materials. It is mainly used in the production of polyester, widely used in chemical fiber, light industry, electronics, construction and so on. More than 90% of the world's PTA is used to produce polyester. PTA is the lower end product of petroleum, and petroleum derived products account for about 92% of the total PTA production cost of PX.


Li Zhoulei told reporters: "in the case of capacity is relatively bottleneck, PTA enterprises enjoy a rare huge profits, the overall start-up load has been at a high level. However, when the price rises rapidly in the short term, its sequelae will inevitably follow. Last year, the ups and downs of the PTA market came into view, and the risk of transactions was constantly accumulating.


However, Li Zhoulei said: "at the beginning of July, Fuhai Chuang's 4 million 500 thousand tons of equipment will be overhauled, and the supply of PTA will be reduced, and the possibility of further upgrading of spot prices will not be ruled out."


In the context of continued PTA trend, the circle of friends in the industry ridiculed PTA enterprises and began to enjoy "Happy Times". At the same time, downstream textile enterprises were miserable.


"The consumption of textile industry is relatively weak this year, and the price of oil has not risen recently, but the price of PTA has risen by almost 19% in the past ten days, so I suspect that someone is manipulating the market because it does not meet the normal market demand, and if the market is booming, the production and sales of the market will flourish," said the chairman of the Zhejiang Fu Li Li textile Limited by Share Ltd. Our company has its own weaving factory. At present, the storage period of fabrics has reached 50 days. The turnover period of previous shipments is usually between 25 days and -35 days. The raw materials we purchased before were purchased according to production, and there was not a lot of stockpiling. At present, the export situation of China's textile and clothing is not ideal, orders have been reduced, and domestic PTA output has not decreased. PTA has risen sharply in this case, which is unreasonable, not the normal market demand. If someone really controls the market in the upstream, it will have a great impact on downstream enterprises. So I hope relevant departments can investigate, otherwise, for our downstream enterprises, it will be worse.


PTA as an important raw material of polyester chemical fiber, there is no doubt that such a large fluctuation will have a great impact on downstream enterprises. Fumily home textiles, founded in 2008, is a home textile production trade enterprise integrating R & D, design, production and trade. It specializes in home textiles and outdoor home textiles. Its products sell well in Europe, America, Brazil and other European and American countries. The annual export volume is over 100 million yuan. The company attaches great importance to original design, with hundreds of new products on the line every month. At the same time, focusing on developing the international market with brand names, the "FUMILY" brand has registered international trademarks in more than 100 countries and regions, including the United States, France and Brazil. It has actively explored new ideas in international trade, used the solid brand advantage, opened the "Amazon" US station and Canada station, and created a new "B2C" cross-border electricity supplier mode. The chairman reluctantly told reporters: "our textile industry profits are 3-5 percentage points. I just returned from abroad to complete the order, resulting in a cost increase of more than 10 percentage points, and this increase is in ten days to go up, such a large price fluctuations will be a devastating blow to SMEs. We call on relevant departments to make investigations, so that some big enterprises can not destroy our industry ecosystem. "


For Yisheng Petrochemical was reported, Li Zhoulei expressed inconvenience to comment, because the contents and data were not verified. But for PTA to get out of this situation in the short term, he said: "it is against the fundamentals. Terminal enterprises are really hurt!


The trend of PTA has caused a lot of complaints in the whole textile circle. The boss of an export-oriented fabric enterprise in Ningbo complained to reporters: "the whole first half of the year is almost in a state of depression. Most factories are just maintaining, and there is hardly any profit. After the trade war, we still do not know how to solve the chemical fiber raw materials and start to speculate. Our entities are really thrilling. If we follow this trend, we generally believe that it is very difficult to persist and support Southeast Asian countries in disguise.


It should be said that from last year's PTA skyrocketing, Yisheng Petrochemical was reported to this year's "repeat of history", downstream textile enterprises are under tremendous pressure, and the survival environment is more and more difficult. Although the report is complicated and difficult to identify, the crime of market manipulation still needs to be defined by relevant departments and legal persons. There is no news yet. However, the sense of powerlessness shown by small and medium-sized textile enterprises in the face of the deterioration of the market environment is indeed worth every enterprise thinking deeply.