In The First Three Quarters, Polyester Factories Become The Biggest Winners In The Industry Chain. How Will The Market Be Interpreted In The Future?

In the first nine months of 2019, China's polyester production was about 37 million tons, an increase of 2 million 920 thousand tons compared with the same period last year, and the cumulative growth rate was nearly 8.5%.

In terms of polyester load, the overall operating rate of the industry decreased significantly compared with the same period last year. Among them, the load in the first quarter was at a low level, about 83.6%, which was significantly lower than that of the same period last year. The load in the two quarter was at a high level near 91.5%, and the load in the three quarter decreased compared with that in the two quarter, but also reached a level of over 90%.

Figure: polyester plant load

1. Import and export of polyester

According to customs data, the export volume of polyester in the first eight months of this year exceeded 5 million 300 thousand tons, accounting for nearly 16.3% of the total domestic output, and the cumulative growth rate was close to 17%. The export volume increased by nearly 780 thousand tons compared with the same period last year. The important source is filament export and its growth rate is as high as 16%.

In terms of imports, the import volume of polyester in the first eight months is close to 820 thousand tons, and its growth rate is as high as 30%. This also explains to a certain extent why this year's market participants generally feel that the terminal demand is weak, while the actual output and demand of polyester are good.

This year, the growth of pet exports is notable. In addition to the rigid growth of the overall external demand, it also benefits from the overall competitiveness of the polyester industry in China as a whole. The sharp increase in imports was mainly due to slicing, which was related to the lagging effect of the policy of regenerative import policy in recent years. The previous policy was blocked by the environmental policy, and with the establishment of the clearing processing plant in the third party area, the import volume of the slice was re entered in the second half of last year, and the import volume increased further this year.

2, polyester profit and inventory situation

In terms of profit, the profit of polyester in the first nine months was good, but it was weaker than last year's performance. From the perspective of the main polyester varieties, the profit differentiation is more obvious, which is basically consistent with the corresponding supply and demand situation.

Figure: Trend of polyester cash flow

Specifically, Filament profit fluctuated and structural differences were obvious. Among them, FDY made good profits in the first quarter, but after April, the profits were not good enough, and it was close to the profit and loss balance. However, most of the POY profits were good, and the profits in the Spring Festival and nearby May were poor. DTY was different from the type of enterprises, and the profit of the small and medium plus bomb factories was far less than that of the melt direct spinning factories. The slice profit is not bad, but has no obvious difference from previous years.

Figure: days of polyester storage in Jiangsu and Zhejiang provinces

In the first nine months of this year, the stock of polyester products fluctuated more or less near the medium level. Among them, in the early March and late 5 months, pet stocks reached a small peak for two times, while the rest of the time, polyester stocks mostly fluctuated in the low level, especially after June.

3. Analysis of polyester downstream market

This year, the domestic demand data for terminal spinning and weaving service were weak, and the growth rate of textile and clothing retail sales was many years low. There was no growth in textile output and a significant negative growth in the output of some samples. The corresponding growth rate of the whole social consumption and economic growth dropped to the low level for many years. The weakness of total economic demand was more obvious in the field of textile and clothing terminals.

In terms of textile exports, garment export data showed weaker performance and negative growth over the past two years, while the export data of textile yarn products still increased, but the growth rate was also significantly lower than that in the past two years.

The demand for terminal spun clothing is weak, and the industrial chain is concentrated in the weaving fabric. This year, the inventory of weaving links has significantly increased to a high level. It is difficult to reduce significantly. The weakness of weaving links is not only related to the weakening of demand growth, but also a significant factor in the significant surplus of supply and demand in the past two years.

Judging from the observed data, the weaving load has been significantly reduced by profit and inventory inhibition this year, but it still can not make the operation pressure of this link improved significantly, to a certain extent, it also reflects that the excessive extent of weaving is very serious.

4, fourth quarter polyester output and demand forecast.

For the fourth quarter of polyester output and demand performance, we need to focus on the seasonal demand rhythm changes brought by the Spring Festival. Late January 2020 At present, the higher inventory in the downstream, especially the high inventory of grey cloth in the weaving enterprises, and the poor operating profit, the possibility for the downstream enterprises to have an early break. After the middle of November, polyester is facing the problem of gradual deterioration of demand.

In terms of polyester production assessment, the output of polyester in the fourth quarter is expected to be close to 12 million 600 thousand tons, and the growth rate is about 7.6% in the same quarter. In the whole year of 2019, the output growth of polyester is expected to be around 8.3%, and the overall growth rate is more optimistic than that of the beginning of the year. Source: chemical fiber sinks, Huatai futures and network