In the blink of an eye, it’s midsummer in July.
Looking back on the first half of the year, the entire industrial chain was shrouded in the haze of the epidemic. The outbreak of the new crown epidemic caused a sharp reduction in global demand, and the “three “Driving a carriage” was severely hampered. Regardless of whether it is the upstream or downstream of the industrial chain, the market in the first half of the year is in a downward channel, and it is difficult to have any good news to stimulate the rise.
The epidemic has led to sluggish terminal demand and hit the textile industry chain hard. At the same time, the sharp decline in crude oil prices in the first half of the year was also negative for the industry chain. On April 21, the settlement price of the May contract of New York WTI crude oil fell to a negative value of -$37.63 per barrel. The extremely low oil prices put heavy pressure on major oil-producing countries such as Saudi Arabia and Russia, and prompted all parties to reach a new round of historic Agreement on maximum production cuts. In May, OPEC+ officially promoted production cuts. In June, OPEC and non-OPEC oil-producing countries agreed to extend the current average daily crude oil production reduction of 9.7 million barrels until the end of July. Production cuts have stimulated crude oil prices to rise, but weak demand and nearly saturated crude oil inventories are difficult to change for the time being, making it difficult for international oil prices to stabilize at the $40 mark.
As of the close on the 29th, New York crude oil August futures rose by US$1.21, closing at 39.70 yuan/barrel; Brent August futures rose by US$0.69, closing at 41.71 yuan/barrel / barrel, China SC crude oil futures main force fell 11.3 yuan / barrel in 2008 to 287.3 yuan / barrel.
Crude oil and the demand side are difficult to boost the market, and the polyester industry chain suffered a “mid-life crisis” in the first half of the year. So, let’s review the situation of polyester raw materials PTA, ethylene glycol and polyester filament in the first half of this year.
Since the second half of last year, PTA has “gone its last breath” due to the serious contradiction between supply and demand. This year, due to the impact of the epidemic and the Crude oil is negative, and the weakening of PTA market is more obvious. From January to March, before and after the Spring Festival, PTA’s load fell slightly due to high inventory and the Spring Festival holiday. However, after April, PTA’s load continued to rise and fluctuated in a range.
Under the bearish fundamentals, the PTA load has still not fluctuated significantly. As of June 26, the PTA load has risen to about 81.1%. At the same time, there are no signs of weakening on the supply side. The maintenance of several units has been repeatedly postponed, including the Hanbang 2.2 million-ton unit at full load, the Yangzi Petrochemical 350,000-ton unit at full load, and the Shanghai Petrochemical 400,000-ton unit at full load. Sheng Ningbo’s 2.2 million-ton unit is expected to undergo maintenance for 2-3 days in July.
In addition, there are still new PTA devices put into production: On the 28th, a new PTA device in Northeast China was officially put into operation. Half of the production line will be opened initially, involving a production capacity of 1.25 million, and it is expected to produce qualified products in the next two days; the other half of the production line is planned to be opened in July; Hengli Petrochemical’s 2.5 million tons PTA device It is put into production and half of the production lines will be opened in June and July. Further expansion of the supply side will undoubtedly be a heavy blow to the PTA market.
Load and supply are rising, but demand is difficult to increase, resulting in PTA inventory rising. After the market resumed work in March, PTA actually removed a wave of inventory, but the demand for polyester yarn could not keep up, and it continued to accumulate inventory. As of the 26th, PTA social inventory rose to around 2.25 million tons, close to the inventory level during the Spring Festival holiday.
Feedback to the price aspect is even more disastrous. In the first half of the year, the internal price of PTA continued to fall, even approaching a low of 3,000 yuan/ton. Driven by fluctuations in crude oil, PTA prices have recovered somewhat, but as of the end of June, they were still hovering around 3,500 yuan/ton. As supply increases and destocking becomes difficult, PTA will transition from destocking to destocking in July, and prices may hover at the bottom in the short term.
In the first half of this year, the ethylene glycol market was volatile and weak. Although the price decline was better than that of PTA, overall, the price was also at a low level, even in April. , fell below 3,000 yuan/ton. It has been in a state of range fluctuation in the later period, but the price increase has not been large. As of the 29th, the internal price of ethylene glycol was around 3,475 yuan/ton.
In addition to weakening downstream demand, what drags down ethylene glycol prices is its own high inventory status. In the first half of this year, the load trend of ethylene glycol has been declining. By the end of the month, the comprehensive operating rate of ethylene glycol was around 60%, but the inventory continued to rise, reaching new highs in the new year. Sluggish shipments and occasional congestion of ships in East China ports resulted in a concentration of goods arriving at the port in the later period, and ethylene glycol stocks rose rapidly. By the end of the month, the stocks of ethylene glycol at the main ports in East China reached a new high of around 1.4 million tons.
It can be seen that in the first half of this year, ethylene glycol has been in a state of accumulation. In fact, the price of ethylene, the raw material for ethylene glycol, was relatively strong in the first half of the year, which can support its price to a certain extent, but it is still difficult to withstand the pressure brought by the weakening demand and its own supply side.
In July, there are multiple sets of ethylene glycol The equipment will be restarted, and the restarted production capacity is far greater than the production capacity lost during maintenance. In addition, Xinjiang Tianye still has plans to put new equipment into production in July. The pressure on the supply side of ethylene glycol has increased again. It is expected that the market outlook will be mainly range-bound.
Polyester filament
High inventory, low demand, serious price shrinkage
As a polyester industry chain In the final stage of the industry, polyester filament prices have continued to fall due to the collapse of the upstream cost end and insufficient downstream weaving support, reaching the lowest level in recent years. Especially on the eve of Qingming Festival in April, due to the impact of the epidemic, it was difficult to place domestic and foreign trade orders, especially foreign trade, which was almost shut down. Weaving manufacturers found it difficult to balance production and sales, and their production enthusiasm was low. The operating rate declined, and the demand for polyester filament decreased. The price of polyester yarn dropped to the lowest level in the first half of the year.
During the May Day period, stimulated by the surge in crude oil, Polyester prices have had a good start, but due to the lack of orders from the weaving end, production and sales exceeding 100 are unsustainable, and polyester prices have fallen again. In June, there was a lack of bright spot products in the weaving market. The hot-selling pongee and polyester taffeta products in the early stage have passed and the inventory has begun to accumulate. According to the sample companies monitored by China Silk City Network, the current gray fabric inventory of weaving companies in Shengze has risen to about 44 days, which is higher than the same period in previous years.
There is no demand, but the operating rate of polyester manufacturers still remains at a high level of about 91%, resulting in polyester mercerized production but cannot be sold. According to China Silk Capital According to statistics from the Internet, the overall inventory of the polyester market is now concentrated at 24-35 days; in terms of specific products, POY inventory is around 6-12 days, FDY inventory is around 17-24 days, and DTY inventory is around 25-36 days About days. Although it has declined compared with the Spring Festival period, compared with the recent period, it has entered a accumulation cycle.
Price is the most direct link between demand and inventory Feedback: As of the 30th, the price of polyester filament FDY products was 5,850 yuan/ton, POY products were 5,250 yuan/ton, and DTY product prices were 6,900 yuan/ton. Compared with the beginning of the year, they were 23.03%, 26.06%, and 22.03% respectively. degree of decline.
It can be seen from the above data that due to the impact of the epidemic, Due to its weak fundamentals, crude oil, polyester raw materials, and polyester filament were all in dire straits in the first half of the year. Without demand to support them, prices were difficult to rise and inventories were difficult to remove. Now that we have entered the traditional off-season, it is still relatively difficult to achieve a major reversal in the market prices of various links in the industrial chain. However, we cannot rule out the possibility of a turnaround for the industrial chain due to the stimulation of good news.
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