Recently, some market participants said that some T400 raw material factories have been closed, resulting in a temporary shortage of T400 raw material supply in the market. The reason why these manufacturers stopped production is the continuous loss of profits from T400 raw materials.
Since the beginning of this year, due to the new crown epidemic Affected by the epidemic, polyester manufacturers’ production and sales have become seriously unbalanced, inventories have accumulated, and raw material prices have continued to plummet, resulting in profit losses. On the market, manufacturers of T400 raw materials are not common, but these manufacturers cannot bear losses and have to stop production. The profits of polyester filament, the most conventional and largest-capacity yarn on the market, are even more disastrous.
In terms of FDY, as the most profitable product among polyester filament products, FDY products are now also in a loss situation, especially 7 At the beginning of the month, FDY’s loss potential reached nearly 450 yuan/ton. In the recent period, although FDY prices have improved slightly, the profitability is still not ideal. As of the 21st, the loss of FDY products has reached about 121 yuan/ton.
POY also performed unsatisfactorily. Since this stage, the degree of profit has been far less than the degree of loss. We have always said that the POY market concentration is relatively high, which has a certain supporting power. However, according to the current market situation, POY profits are still more likely to shrink further. As of the 21st, POY’s profit loss had reached about 266 yuan/ton.
In terms of DTY, the situation of texturing manufacturers this year It is also not satisfactory, and most of them are in a state of loss. This has led to serious losses for DTY products this year, which is the largest loss among the three products. In mid-July, the loss of DTY products once reached nearly 700 yuan/ton. At present, the improvement in the loss is not obvious. As of the 21st, DTY’s loss room has reached about 496 yuan/ton.
In the first two years, polyester yarn profits suffered losses; To a large extent, the reason is that cost-end PTA occupies high profits and devours the profit space of downstream products. However, in the recent period, PTA’s profit situation is not ideal, and it is also in a state of loss most of the time. So what are the reasons for the continued loss of polyester yarn profits?
Production Capacity
Production capacity has also been talked about the most recently. topic. In the first half of the year alone, 5 new direct-spinning polyester filament devices were put into production in China, with a total production capacity of 1.15 million tons/year. The production devices all belong to domestic mainstream manufacturers. Hengyi, Xinfengming, Hengli, and Shenghong have successively put into production, and continue to Expand the concentration of production capacity in the direct spinning polyester filament industry. In the second half of the year, there are still 7 new units planned to be put into operation in the domestic direct-spinning polyester filament industry, all of which are expansions of production capacity of mainstream manufacturers, with a total production capacity of approximately 2.4 million tons per year. The increase in production capacity will naturally put a significant pressure on prices. As other costs of all parties are difficult to change significantly, it is normal for polyester profit margins to be diluted.
Inventory
Inventory is the key to the profit of compressed polyester yarn one of the reasons. Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 33-41 days; in terms of specific products, POY inventory is around 11-18 days, FDY inventory is around 22-32 days, and DTY inventory is around 22-32 days. to about 30-41 days. As can be seen from the figure below, the polyester yarn inventory in polyester factories is currently on a sharp upward trend, and the accumulation of inventory is obvious. The degree of inventory accumulation has exceeded the inventory accumulated due to the epidemic before and after the Spring Festival. At the same time, the operating rate of polyester manufacturers is relatively high, which is also a negative pressure on inventory.
Requirements
The demand of weaving enterprises has a clear supporting effect on the price, inventory and profit of polyester filament. However, recently, the demand for polyester filament by weaving enterprises has not improved significantly. , the operating rate of looms in Shengze area is only maintained at around 60%, but the inventory has reached 45-46 days. Therefore, polyester production and sales have basically remained at around 60% in the near future, and it is difficult to make a big breakthrough. The demand is not strong, and the production and sales of polyester manufacturers are uneven, so they naturally start to accumulate inventory, reduce prices, and suffer losses.
Polyester profit losses are caused by many factors However, in the short term, the editor still believes that the possibility of continued profit losses will be greater, because the foreign epidemic has begun to break out again, and it may be difficult for terminal demand to change significantly. The layers of links are fed back to the upstream, and the situation of polyester yarn is difficult to change. Great turnaround.
South Korea: Currently, the COVID-19 epidemic in South Korea is at a critical juncture of spreading across the country, and the situation is very serious. Starting from the 23rd, South Korea will expand the scope of the second-level response to maintain social distance to the entire country;
UK: The epidemic in the UK has worsened, and Birmingham, the second largest city, has The city is facing another lockdown;
Poland: The Polish government plans to extend its ban on international passenger flights again from August 26 to September 8, and expanded the no-fly list from 44 countries to 63 countries;
Australia: On August 20, local time, the Australian Capital Territory Department of Health announced an extension of the state of emergency for 90 days;
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