How To Break The Polyester Industry Chain After The New Crown?

1. Brief introduction of epidemic situation

As at 24 hours in February 13th, according to the reports of 31 provinces (autonomous regions and municipalities directly under the central government) and the Xinjiang production and Construction Corps, there were 55748 confirmed cases (including 10204 severe cases), 6723 cases were cured and discharged (269 cases in Hubei province), 1380 cases were cumulative deaths (Hubei province was duplicated by statistics, 108 cases were reduced), and 63851 cases of confirmed cases (1043 cases in Hubei province) were confirmed. There were 10109 cases. There were 493067 close contacts and 177984 close medical contacts.

The outbreak of the new crown is more severe than SARS, which is more severe than the impact of SARS epidemic on the economic market in 03 years. In the short term, in order to control the spread of the epidemic, the delay of reemployment and the impact on logistics will directly affect the operation of the polyester industry. But we can also see the dawn. The number of confirmed cases outside Hubei has dropped ten. This also shows that the impact of the epidemic is gradually weakening. This article will analyze the impact of the epidemic on the polyester industry chain and how to break the polyester industry chain.

Two, the impact of the epidemic on polyester industry chain

From the automation level of polyester industry chain, the upstream is mostly the automation degree of large-scale refining and chemical equipment, and the downstream is mostly labor intensive industry. The more power we need to move downstream, the greater the impact of the Spring Festival and the epidemic.

The impact on textile and garment industry is divided into two aspects: domestic demand and external demand. The impact on domestic demand is more than 03 years. In 19 years, the textile and garment industry is facing the "warm winter" and the domestic demand is obviously frustrated. In the first quarter, the Spring Festival orders are stacked up as the selling season, but the epidemic is stronger than 03 years. The epidemic covers most parts of the country, and has a great influence on the Spring Festival during the traditional consumption season. Meanwhile, the epidemic also has an adverse effect on the demand for spring clothes, which makes the "warm winter". After the reappearance of "cold spring", even the demand for summer clothing is still adversely affected. In terms of external demand, WHO director general Tan Tak said in January 30th that the outbreak of pneumonia caused by the new coronavirus was a "public health emergencies of international concern", but no travel and trade restrictions on China were recommended. There is possibility of transfer and delay from overseas orders. The second round of trade negotiations between China and the United States have not yet begun and the market wait-and-see sentiment is still alive. The sudden outbreak of the outbreak will aggravate the market's cautious mood.

The influence on downstream weaving is mainly affected by workers' resumption of work and loom load increase. After the Spring Festival, there are difficulties in recruiting workers in the lower reaches of the Spring Festival. This year, because of the need for epidemic prevention and control, the recruitment of downstream weaving enterprises will be more difficult. At the same time, there is also a certain impact on logistics, which makes the downstream weaving industry lack of raw materials to transport, and the embarrassing situation that products can not be transported will need to resume in time.

The impact on polyester is mainly the pressure on inventory and cash flow. The stock pressure of the polyester factory which has been shut down late before the Spring Festival is becoming more and more prominent. The stock of the polyester factory with large inventory has exceeded 20 days, and the factory inventory with earlier production is still near 10 days. By January 30th, the stock days of polyester staple fiber are 4.96 days, the DTY stock is 24 days, and the FDY stock is 17 days. By February 13th, PET staple stocks rose 8.64 days, DTY stocks rose 9 days, and FDY inventories rose 8.5 days. During the epidemic, logistics is blocked, and downstream weaving production is slower. Stock pressure of polyester factories will increase. It is estimated that polyester stocks will break through the historical high level. The pressure of stock and cash flow will continue to increase in polyester factories, forcing polyester factories to cut down production continuously.

The impact on PTA. With the increase in production and production of polyester factories, and the obstruction of logistics and the decline of freight efficiency, PTA consumption has been suppressed. And before the Spring Festival, there were 2 million 500 thousand tons of Hengli petrochemical and 1 million 200 thousand tons of Sino Thai Petrochemical plant put into operation, and the load of the PTA device reached more than 90%, and PTA production is expected to be high. The estimated output of PTA will reach nearly 4 million tons in February. It is estimated that the cumulative volume of PTA will reach more than 1 million tons in 1-2 months. The PTA social inventory will also exceed the historical high of 2 million tons. From the perspective of cash flow, the PTA processing difference before the Spring Festival reached 700 yuan / ton, but with the rapid decline after the Spring Festival, PTA processing rapidly compressed, fell to less than 400 yuan / ton, and the cost of PX purchased before the festival was close to 800 US dollars / ton, PTA factory started less willing, and because most of the social inventory was in the PTA factory due to the obstruction of the material flow, PTA factory cash flow pressure suddenly increased. The approximate load rate of PTA plant will decline.

Three, how will the polyester industry chain break under the post new crown epidemic situation?

PTA market logic has been clear, after the Spring Festival holiday fermentation, the decline in leading chemicals, with the market panic, PTA ushered in a small callback. However, PTA itself is weak in supply and demand, sharp in contradiction, high in storage and suppressing the price upward, and the processing error approaching the limit further limits the price down and the dilemma.

The market is concerned about the way to break the current stalemate in PTA, focusing on the degree of PTA factory down and the resumption of work in terminal factories. At present, in the critical period of domestic epidemic control and control, the progress of resuming work is still lower than expected. On the one hand, there are risks in controlling and controlling the health of employees themselves. On the one hand, logistics is not smooth, which affects the procurement of raw materials and sales of products. Therefore, it is necessary to synchronize the whole industry chain upstream and downstream. Any delay in the resumption of any part will affect the progress of the whole industry chain. According to the optimistic estimate, the weaving load will increase from 17 to 24 days, assuming that the downstream weaving will be resumed on the 24 day, and the load will be raised to the highest 80%. However, the overall load will not increase significantly in February. PTA's high social inventory is difficult to get rid of, but in textile and clothing difficult to enhance the background, loom load lifting is limited. Therefore, relying only on the increase of downstream loom load, it is difficult to boost the consumption of PTA stock, so the reduction of PTA supply side is the only way to solve the PTA inventory pressure and break the PTA price deadlock.

Risk warning:

We have striven for the objectivity and impartiality of the report, but the views, conclusions and recommendations in this article are for reference only. The information or opinions in the report do not constitute the basis for investors to make investment decisions accordingly.