In 2019, the PTA market was affected by factors such as supply and demand, PX profits, processing fees, and the commissioning of new devices in the polyester industry chain, and the price fluctuated greatly. As of the end of the year, the market’s center of gravity was at a low level for the year. Although some equipment was overhauled at the end of the year, the decline still did not change.
The newly added PTA production capacity in 2019 is mainly the 1 million tons of Sichuan Energy Investment, the 2.2 million tons of Xinfengming, and the 2.5 million tons of Hengli (Phase IV). In 2019, the domestic PTA production capacity base was 46.78 million tons/year. It is comprehensively estimated that PTA output in 2019 will be about 44.8 million tons, with an increase of 9%. It is planned that 13.8 million tons of new PTA units will be put into operation in 2020, which marks the coming of a new refining era, and the pressure in the later period will become more and more obvious.
From the perspective of terminal looms, the looms have ten more days of holiday this year than in previous years. On the one hand, it is because the Chinese New Year is earlier this year, but more The important reason is still affected by the Sino-US trade friction and the slowdown in domestic economic growth. The current domestic terminal textile and apparel market is in a downturn. Moreover, the sales volume of down jackets, an important growth point of domestic textile demand recently, is relatively poor.
1
Weaving companies have New Year holidays Earlier
Take a weaving company in Suzhou with 350 water-jet looms as an example. This company mainly focuses on foreign markets and has few domestic sales. This year, foreign orders mainly come from Southeast Asia, the Middle East and other countries, and there are basically no orders from the United States. Most merchants in the market plan to start holidaying in advance around December 10th, while merchants doing order production will have a holiday around January 10th. The time to resume work after the holiday is usually on the eighth and tenth day of the lunar month. This year’s overall holiday time is ten days longer than in previous years. After New Year’s Day, about 50% of factories may be closed for the holidays. The one with better efficiency should be around No. 10. In previous years, the normal inventory would not exceed two months. The inventory of a machine was between 10,000 and 15,000 meters. This year, it has reached 30,000 to 35,000 meters.
2
The market lacks confidence and down jacket sales are poor
The main contradiction is still weak terminal demand and lack of confidence in the market. At present, FDY is falling faster than PTA, and the downstream may consider shutting down in mid-December. The inventory of gray cloth is 2-3 times that of previous years. Prices are expected to continue to fall, and the current methods of reducing production, reducing burdens, and low-price promotions have achieved relatively modest results. The reason why downstream companies dare not shut down operations is because they may have difficulty recruiting workers if they restart operations in the future. At present, water spraying is very poor, cotton spinning is also very poor, and downstream factories dare not stock up on raw materials. This situation is still relatively difficult to change in the short term. After New Year’s Day, downstream looms will slowly stop production. This year, the sales volume of Oxford cloth in Shengze area is relatively better, and the orders for outdoor products are better, but the overall orders for polyester taffeta are not good. The overall shipment situation of down jacket fabrics is not optimistic. On the one hand, it is affected by the warm winter, and secondly, the price is relatively high.
3
The growth rate of polyester production capacity cannot match the expansion rate of PTA production capacity
Take another polyester company in Suzhou as an example For example, the company currently has a filament production capacity of 580,000 tons, including 400,000 tons of semi-gloss, 100,000 tons of gloss, and 80,000 tons of chip spinning. The person in charge of the company said that it is expected that there will still be 200-300 yuan in downward potential for product prices in the later period. Hengli Petrochemical No. 4 (capacity: 2.2 million tons) PTA unit is expected to be put into operation on December 28. Hengli Petrochemical No. 5 (capacity: 2.2 million tons) PTA unit is expected to be put into operation from April to May next year. The PTA unit production progress is in line with market expectations expectations. The decline in terminal demand will lead to a decline in polyester production. Polyester production capacity is likely to maintain an annual growth rate of three to four million tons in the next two years. Orders for winding heads from Barmag and TMT have been scheduled for the next few years. This round of market competition is very fierce, and polyester will not stop production as long as cash flow can be guaranteed. Next year, the winding heads of Barmag and TMT will have a production capacity of two to three million tons. Together with short fiber and bottle flakes, the growth rate of polyester may reach 8%-10%.
According to statistics, the new polyester production capacity in 2020 is expected to reach 5.15 million tons, corresponding to PTA’s The new demand is about 4.3 million tons, which is far less than the 13.8 million tons of PTA production capacity planned to be put into production in 2020. Costs are falling, processing fees are falling, and under a large production expansion cycle, it is difficult for the PTA price center to reverse.
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