On July 14, Xiang Jiongjiong, general manager of Rongsheng Petrochemical, said in an exclusive survey by the Financial Associated Press that the recovery in downstream demand is one of the reasons for the current performance improvement, and he is also very optimistic about the performance expectations for the second half of the year. According to the recent semi-annual performance increase announcement issued by Rongsheng Petrochemical (002493.SZ), it is expected to achieve attributable net profit of 3.1 billion to 3.36 billion yuan, a year-on-year increase of approximately 2 times.
In the same “PX-PTA-polyester-textile” industry chain as the company are Hengli Petrochemical (600346.SH), Hengyi Petrochemical (000703.SZ) and Tongkun Petrochemical (601233. SH).
The first quarter report shows that in addition to the decline in the performance of Tongkun Co., Ltd., which is mainly engaged in polyester filament, the performance of more upstream PTA manufacturers such as Rongsheng Petrochemical, Hengyi Petrochemical and Hengli Petrochemical all increased significantly.
As for the general performance increase of PTA manufacturers in the first half of the year, analyst An Guang believes that it is mainly due to the early plunge in crude oil, which triggered manufacturers in various downstream links to stock up on bargains.
However, there are large differences of opinion regarding the market trend in the second half of the year. The key point is whether the downstream demand side will pick up.
Xiang Jiongjiong, general manager of Rongsheng Petrochemical, told a reporter from the Financial Associated Press: “During this wave of market conditions, our PTA basically has no inventory, and it is still the same so far.” He revealed that in the third quarter, the European market was The overall orders are now stable and rising, and the company is very optimistic about its performance expectations for the second half of the year.
According to him, in the first half of the year, downstream manufacturers mainly prepared materials for this year’s autumn and winter models, but due to the epidemic in Europe and the United States, the overall stocking was less. After entering the third quarter, the demand for stocking the spring and summer models of 2021 has begun, and the overall demand has improved: “We have brother companies doing printing and dyeing downstream, so we are very clear about the downstream order market.” On July 15, a reporter from the Financial Associated Press reported that investment Contacted Hengli Petrochemical as a reporter, relevant personnel also said that the company’s PTA sales are currently stable and inventory is at a low level, but it is impossible to predict the market outlook.
Industry analysts hold different views on the market outlook. On July 15, Chen Shuxian, chief petrochemical analyst at Cinda Securities, told a reporter from the Associated Press that the short-term mismatch between supply and demand for PTA has worsened, and will show a trend of first decline and then rise in the second half of the year. Analyst An Guang believes that the overall market situation of PTA in the second half of the year is not optimistic.
Both parties clearly pointed out that PTA production capacity will expand rapidly in the second half of the year and there will be a mismatch between supply and demand. Chen Shuxian said that since the end of June, Hengli Petrochemical’s 2.5 million tons/year PTA unit has been put into operation. In the second half of the year, there will be 3 million tons/year of Yisheng Petrochemical, 2.2 million tons/year of Xinfengming Phase 2, and 2.4 million tons/year of Honggang Petrochemical. New equipment will be completed and put into operation in 2018, and supply pressure will be high.
On the demand side, Anguang said that after the early plunge in crude oil triggered manufacturers in various downstream links to stock up on bargains, the operating load of domestic looms has been at the lowest point in the same period in seven years since July, while the gray fabrics in Shengze area Inventories are at historically high levels and it is difficult to remove them. Chen Shuxian believes that in the third quarter, overseas epidemics and terminal textile clothing have entered the traditional off-season, and the overall demand is expected to be weak. When the Q4 Christmas season and the 2021 spring and summer new product raw material procurement wave begin, terminal demand is expected to recover again.
In response to disagreements over whether demand in the apparel industry will pick up in the third quarter, reporters from the Financial Associated Press contacted PTA’s downstream polyester filament manufacturer Tongkun Co., Ltd. (601233.SH) and apparel manufacturer Peacebird (603877.SH) as investors. SH).
Tongkun shares said that July-August is the off-season for the traditional clothing industry, and demand has not yet recovered. It is expected that downstream clothing manufacturers will start preparing materials at the end of the third quarter, and combined with the impact of the Christmas season, demand is expected to increase. The relevant person in charge of Peacebird only revealed that the company’s autumn and winter ordering meeting in June has ended, and that next year’s spring and summer clothing will be stocked two quarters in advance as usual.
It is worth noting that recently, in the printing and dyeing process between polyester filament and clothing, the price of dyes has increased. On July 1, Runtu Co., Ltd. (002440.SZ) announced that the company’s dye sales from May to June had improved compared with April and that the price of disperse dyes had increased. In addition, according to the China Chamber of Commerce for Import and Export of Textiles, clothing exports continued to decline in the first half of the year due to reduced external demand, but the decline in June was significantly narrower than that in April and May, showing signs of recovery. </p