Polyester Manufacturers High Inventory, Low Price, Negative Profit, But Maintain Over 91% Operating Rate! Is It "Steel Wire" Or "Gambling"?

Some time ago, polyester filament has been in the wentun rising mode, but in recent two days it began to slow down. Up to now, the price of PET filament FDY is about 5750 yuan / ton, that of POY is about 5255 yuan / ton, and that of DTY is about 6700 yuan / ton.

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At the same time, polyester fiber profits, which had been improved, also began to fall further, and the profit loss margin of various products was further expanded. The loss of FDY / DTY is from RMB 245 / T to RMB 150 / T.

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However, from the perspective of start-up rate, polyester manufacturers are still at a high level in the near future, which is maintained at about 91.3%, while the startup rate of weaving enterprises is only around 64%. A comparison between upstream and downstream start-up rates shows a contradiction.

For polyester manufacturers, downstream weaving enterprises are the most direct way to digest their inventory. However, the market situation of weaving manufacturers has not improved significantly. The high stock of grey fabric leads to a further decline in the start-up rate and the demand for polyester filament has not improved substantially. At the same time, polyester manufacturers own inventory is not at a low level, on the contrary, began to enter the accumulation stage.

But polyester manufacturers in high inventory, low price, negative profit, low demand, still maintain a high operating rate, why?

　　01

On the way, polyester production capacity concentrated

As we all know, the production capacity release plan generally takes several years to plan. Even if there is an outbreak this year, the production capacity is already on the way and has to be launched, which undoubtedly makes the start-up rate of polyester manufacturers go up. In the first half of this year, five sets of direct spinning polyester filament units were newly put into production in China, with a total production capacity of 1.15 million tons / year. Compared with the 550000 tons / year in the same period of last year, the commissioning progress was significantly accelerated. In terms of the group to which the production units belong, all the units put into operation in the first half of the year belong to domestic mainstream large factories. Hengyi, xinfengming, Hengli and Shenghong have successively put into operation to continue to expand the production capacity of the direct spinning polyester filament industry Concentration.

However, in the second half of the year, there are still seven new units planned to be put into operation in the domestic direct spinning polyester filament industry, all of which are the capacity expansion of mainstream large factories, with a total production capacity of about 2.4 million tons / year. Under the optimistic expectation, the domestic direct spinning polyester filament production capacity will exceed 34 million tons / year by the end of 2020. It is more than 10% higher than the end of 2019. Even if the polyester plant maintenance situation, but the strength is far less than the production capacity.

02

Use of low price crude oil reduces the cost of polyester fiber

Recently, some media said that at least 80 ships have been queuing up in Yingkou, Rizhao, Qingdao and other ports for more than a month. As the world's largest crude oil consumer, a large amount of crude oil purchased by China this year has arrived in succession, so that the port has been blocked by tankers and waiting for unloading! Analysts and port managers say the congestion is likely to continue until the end of the month. The reason for this phenomenon is that domestic refiners and oil related enterprises purchased cheap oil in April and may, while the arrival of crude oil affected by the epidemic situation was delayed.

Then we can also think that polyester manufacturers maintain a high start-up, an important reason is that the crude oil used in the production of polyester filament is the cheap crude oil previously purchased, so the cost of polyester filament will be reduced. Even though the polyester fiber is in a loss predicament on the surface, according to the price of cheap crude oil, the profits of polyester fiber may not be so much lost or even profitable Figure. This also led to polyester manufacturers in the case of more negative factors, still choose to start high, after all, the cost is too low.

　　03

New crown vaccine market speed up further, polyester big man optimistic about the future market

Recently, there has been more and more news about the new crown vaccine.

Russia has registered the world's first vaccine against the new coronavirus, Sputnik V, and its clinical trial was successfully completed from June to July this year, the Ministry of Health said Friday. On August 15, the Russian Ministry of Health announced that it had started production of vaccines.

Liu Jingzhen, chairman of sinopharma group, said that the domestic new crown inactivated vaccine is expected to be on the market by the end of December, with an annual output of more than 200 million doses.

In addition, the patent application for the new crown vaccine jointly filed by Chen Wei, academician team of Academy of military medicine, Academy of Military Sciences and kangxinuo biological Co., Ltd., has been granted the patent right, which is the first new crown vaccine patent in China.

This year, no matter polyester, weaving, or clothing enterprises, the biggest driver of the serious market decline is the outbreak of Xinguan epidemic, which leads to serious losses in both domestic and foreign trade. When the domestic epidemic situation is under control, the foreign epidemic situation is still spreading, the global economy is declining and the consumption level is low. Now the vaccine is expected to come into the market, which will boost the market confidence. Once the vaccine is listed and the residents are vaccinated, then the global economic production will gradually recover, the consumption capacity will be improved, and the demand for textile and clothing products will increase. Feedback to the aspect of polyester, de stocking, price increase and profit will be realized.

Moreover, at present, the polyester market has a high concentration of production capacity, and the discourse power is concentrated in the hands of Hengli, xinfengming, Tongkun, Shenghong and other leading enterprises. The polyester giants are optimistic about the future market development, and the operating rate is naturally difficult to decline.

　　END

If we look at the future market development from the perspective of polyester market starting rate, it seems to be optimistic. However, there are still many negative factors, especially the imbalance between supply and demand, which is difficult to change in a short period of time. Polyester market next market trend, or to see the epidemic situation, changes in demand, consider various factors.