Under the pressure of large-scale refining and chemical production, polyester faucets continue to expand production capacity!
On June 30, as the Shenghong Refining and Chemical Integration Project successfully completed the intermediate delivery of the first batch of main production units such as atmospheric and vacuum distillation, it officially entered the production preparation stage. The market is paying more and more attention to the trends of Shenghong Group. Recently, under the pressure of the launch of large-scale refining and chemical operations, this leading polyester company continues to expand its production capacity!
1. Suqian’s new 500,000-ton super-simulation functional fiber project
Recently, Jiangsu Dongfang Shenghong Co., Ltd. announced that in order to further enhance the market competitiveness of polyester filament, the company’s secondary wholly-owned subsidiary Guowang High-Tech Fiber (Suqian) Co., Ltd. will invest in the construction of an annual production capacity of 500,000 tons of super-simulated functional fiber projects.
It is reported that the total investment of the project is 3.958 billion yuan, of which the construction investment is 3.747 billion yuan, the initial working capital is 76 million yuan, and the construction period is 2 years. After calculation, the project is expected to have annual sales revenue of 3.365 billion yuan and total profit of 746 million yuan. The project is mainly targeted at civilian products such as clothing decoration and can meet the market’s growing objective demand for various differentiated and functional polyester fibers with excellent performance.
Guowang Suqian’s annual output of 500,000 tons of super-simulated functional fiber project is located in Siyang County Economic Development Zone, Suqian City, Jiangsu Province, covering an area of approximately 821.69 acres. The construction scale is to produce 500,000 tons of super-simulated functional fibers per year, producing polyester filament POY (pre-oriented yarn) and FDY (fully drawn yarn). The production plants and supporting projects constructed include: polyester unit CP1CP2, spinning unit 1, PTA warehouse 1, heating medium station 1, comprehensive power station 1, etc.
Dongfang Shenghong said that through the implementation of the above projects, the company’s polyester filament production capacity can be improved, the product varieties of polyester filament can be enriched, and the super-simulation functionality and differentiation of products can be improved. conversion rate, increase the added value of the product, further enhance the market competitiveness of the company’s polyester filament, enhance the company’s core competitiveness in the context of fierce industry competition, and achieve sustainable development of the company.
2. Lianyungang’s new 900,000-ton ethylene glycol project
Coincidentally, recently, the official website of Shenghong Petrochemical released the full environmental impact report (approval draft) and public participation instructions for the Shenghong Refining and Chemical Integrated Product Optimization Project (2# Ethylene Glycol + Phenol/Acetone). Among them, the new construction contents of this project are:
① Newly built 10/900,000 t/a 2# ethylene glycol unit (ethylene oxide/ethylene glycol unit), 40/ 250,000 t/a phenol/acetone unit;
② 19 new storage tanks are built in the factory area and 6 new storage tanks are built in the reservoir area, with a total tank capacity of 19.89m3, including benzene tanks for chemical raw materials 2 sets (6,000 m3), 2 chemical intermediate raw material cumene tanks (10,000 m3), 15 chemical product ethylene oxide, ethylene glycol, diethylene glycol, triethylene glycol, phenol, acetone tanks (180,100 m3); 6 by-product heavy alcohol and tar tanks (0.28 million m3), etc.
Shenghong Refining and Chemical (Lianyungang) Co., Ltd. was established on July 23, 2014. It was invested and established by Lianyungang Hanhong Investment Co., Ltd., a subsidiary of Shenghong Holding Group Co., Ltd. Shenghong Refining and Chemical (Lianyungang) Co., Ltd. plans to build a new 100/900,000 tons/year ethylene oxide/ethylene glycol unit and a 400/250,000 tons/year phenol/acetone unit in the existing plant area. The project The industry it belongs to is the petrochemical industry. The waste gas of this project will be discharged up to the standard through the expansion of existing project NBTO, CO and sewage treatment plant waste gas treatment facilities, and the new waste gas facilities. The waste water of this project will be discharged through the new high-salt wastewater treatment facilities, relying on the oily wastewater treatment system of the existing project, The water can be reused after treatment in the reclaimed water treatment system, taken over to meet the standards, or discharged into the deep sea to meet the standards. After the completion of the project, it can improve the competitiveness of the enterprise. In addition to meeting the development needs of Shenghong Petrochemical Group, the surplus will be used as products for Lianyungang Petrochemical Industrial Park and the East China market. The proposed project is located within the existing factory area and no new land will be added.
A polyester leader with a total market value of 100 billion
Since November last year, Dongfang Shenghong’s stock price has continued to rise. In just over eight months, it has increased approximately three times, becoming the second A-share company in Suzhou with a total market value of 100 billion.
On July 7, Dongfang Shenghong, a leading private refining and chemical company, released its semi-annual performance forecast for 2021. It is expected to achieve a net profit attributable to shareholders of the listed company in the first half of this year of 11 billion to 1.2 billion yuan, a year-on-year increase of 1645.02% to 1803.65%.
Dongfang Shenghong believes that the downstream demand of the chemical fiber and petrochemical industry has improved significantly, coupled with the impact of rising crude oil prices, the industry has entered a recovery cycle and the prosperity has increased. The company’s production and operation have been further improved and good profitability has been maintained; the Ganghong Fiber’s 200,000-ton annual differentiated functional chemical fiber project and the Zhonglu Technology’s 60,000-ton annual PET recycled fiber project were completed and put into production in the second half of 2020, with year-on-year increases profit contribution.
Public information shows that Shenghong Holding Group Co., Ltd. was established in 1992 and is headquartered in Shengze, Suzhou. Create a new high-end textile industry chain from printing and dyeing, chemical fiber to petrochemicals and refining, and grow into an innovative high-tech industrial group with petrochemicals, textiles and energy as its main industries. In 2019, Shenghong Group ranked 132nd among the “Top 500 Chinese Enterprises” and 29th among the “Top 500 Chinese Private Enterprises”. Oriental Shenghong, as the only shareholder of Shenghong Group,��The company platform, in June 2018, borrowed money from Oriental Market, reorganized the meeting, and purchased 100% of the equity of Guowang High-tech held by Shenghong Technology and China Development Bank through non-public issuance of shares for a consideration of 12.733 billion yuan. After the transaction was completed in August 2018, Guowang Technology became a wholly-owned subsidiary of the listed company, and Shenghong Technology directly held 68.71% of the shares of Oriental Market and became the new controlling shareholder. On September 27, 2018, the company’s securities abbreviation was changed to “Oriental Shenghong”.
Dongfang Shenghong is based on the polyester chemical fiber industry and implements vertical integration of the industrial chain, actively building a complete “crude oil refining-PX/ethylene glycol-PTA-polyester-chemical fiber” The structure of integrated operation and development of the entire industry chain and the integrated development pattern of upstream and downstream. Up to now, the company’s current product structure is mainly filament, and PTA is mainly used for its own use. In 2020, the company’s DTY product output was 1.0282 million tons, POY output was 483,100 tons, and PTA output was 1.5272 million tons, of which PTA’s external sales volume was only 868,700 tons.
Xie Jianbin, an analyst at Shenwan Hongyuan Securities, previously said that due to the impact of the commissioning of domestic private refining and chemical projects, PX production capacity has entered a stage of rapid release. Factory operation plays a key role, which may make it difficult to exit production capacity; on the other hand, polyester leaders benefit from their own industrial supporting facilities and late-mover advantages and continue to increase PTA production capacity, and the industry will show a trend of excess in the future. The substantial expansion of production in the upstream of the industrial chain has led to a relaxed supply and demand pattern. Future expansion of polyester filament production will be concentrated in industry leaders, with stable production capacity growth and a high probability of the profit link of the industrial chain moving backward.
According to statistics from Shenwan Hongyuan Securities, the new domestic polyester production capacity in 2020-2021 will be 4.25 million tons/year and 3.55 million tons/year respectively. Data from relevant research institutions show that in 2019 The annual domestic filament production capacity is 40.4 million tons. Adding the assumption that the industry will withdraw 1.5 million tons of filament production capacity in 2020, the growth rate of filament production capacity in 2020 will be approximately 6.8%; assuming that some backward production capacity will exit in 2021, the production capacity growth rate may remain at 8 %the following. The compound growth rate of domestic polyester filament apparent consumption from 2013 to 2019 was 7.8%, and the consumption in 2019 increased by 6.1% year-on-year. In 2020, the demand for filament yarn fell off a cliff, and the prosperity fell to the bottom. As the domestic epidemic has been effectively controlled, demand has recovered ahead of overseas demand. Domestic textile and apparel demand has recovered significantly since August 2020. The retail data for that month turned positive year-on-year, and domestic apparel and textile export business gradually recovered in the second half of the year.
Xie Jianbin believes that overseas demand will enter the recovery stage in 2021 due to the impact of vaccination. At the same time, the rebound in oil prices has caused some downstream demand for inventory replenishment. At the same time, coupled with the stable growth rate of the supply side, in 2021 Polyester filament may usher in a new boom cycle. In addition, Dongfang Shenghong’s 16 million tons/year refining and chemical integration project is in the final construction stage. It is expected that the overall project will enter the commissioning state at the end of 2021, realize the full process in 2022, and contribute to annual performance in 2023. </p
