On January 15th, another batch of downstream weaving and texturing companies announced that they would officially enter the Spring Festival shutdown state. From the New Year holiday to the 10th and then to the 15th of this month, polyester downstream factories have been delisting in a centralized manner. So far, except for some individual benefits Except for taller and larger enterprises, almost 90% of weaving, texturing, dyeing and finishing enterprises have taken vacations and stopped working. This year’s textile and polyester enterprises can basically be said to have come to an end. Even so, there are still some “tenacious in production” companies that continue to operate, partly to hurry up and catch up with the last batch of orders before the holiday; partly because the high receivables have not yet been received; and some companies are still in production. Hesitating about the last choice of stocking up before the holidays. Based on the trend of polyester filament at the end of this year, post-holiday fundamental expectations, and post-holiday trends in previous years, you can refer to the stocking plan as appropriate.
First of all, at present, the price of polyester filament has been unexpectedly strong in the past month. On the one hand, due to the intensive Spring Festival maintenance of polyester factories this year, which was implemented relatively early and in place, most of the The polyester factories supporting refining and PTA have not postponed a large number of maintenance, and the implementation is relatively timely, so that the polyester factory inventory has been within the control range after entering December; on December 5, 2019, polyester filament POY in Jiangsu and Zhejiang regions The average inventory of the , FDY and DTY industries was around 9, 11 and 20.5 days. By the end of December, the industry inventories of the three major specifications were 8.4, 10 and 18 days. As of January 9, the inventory levels of the three industries were at 8.6 days, 10.1 days, and 16.4 days. It can be seen that polyester factory inventories have been fluctuating within a relatively reasonable range at the end of the year, and the corresponding corporate sales policies have not been significantly relaxed. On the other hand, oil prices have soared due to the escalation of the conflict between the United States and Iran at the beginning of the new year: The Iraqi capital Baghdad International Airport was attacked by three rockets on the 3rd, and the news that the United States launched an airstrike that killed Iran’s top military commander triggered people’s Tensions in the Middle East escalated and concerns threatened the supply of crude oil. Then, with the expected escalation of conflicts, oil prices surged sharply in recent days, and the spot price of PTA futures rose sharply. Although the downstream looms were shut down for vacations at this time, polyester filament due to insufficient inventory High prices rose rapidly under cost pressure. Weaving and texturing companies that have always “buy up but not down” have taken action one after another. During this period, polyester filament production and sales have repeatedly increased, and downstream companies have been forced to replenish their stocks ahead of the Spring Festival due to unexpected increases in raw materials.
Under a series of chain effects, the overall inventory of the polyester factory industry this year is at a relatively low level compared with the same period in recent years. Furthermore, at present There are less than two weeks left before the Spring Festival. Polyester factories such as Xinfengming, Tongkun Hengtong, Ningbo Dawo, Huabao and Zhejiang Youfu will conduct maintenance before the holiday. Therefore, judging from the trading days less than two weeks before the holiday, polyester filament prices are basically in a consolidation situation. At the same time, most shipment plans have been completed ahead of schedule due to the “U.S.-Iran geopolitical conflict” incident, and polyester prices have basically locked in pre-holiday discounts. It is very limited, so weaving and texturing companies that have not yet been delisted can just stock up appropriately. There is not much hope of “beating the buzzer” to buy the bottom at a preferential promotional price.
Speaking of pre-holiday stocking, it is naturally the top priority for weaving and texturing companies before the Spring Festival holiday. Most textile companies officially start production on the 15th day of the first lunar month after the Spring Festival. They are usually busy with machine modifications and start-ups, and on the other hand, they are busy with part of the weaving process. The machine operators were not available in time and were busy recruiting workers. Therefore, in order to start production smoothly after the Spring Festival, the pressure on the work process after the Spring Festival will be reduced, and ensuring sufficient raw materials is the first to do so. Furthermore, looking at previous years, at the beginning of the Spring Festival, polyester chemical fiber factories have a “good start” sales practice. When there are no major negative factors for raw materials, the market generally has expectations of price increases after the Spring Festival. Therefore, combined with the initial price increase after the holiday and the reduction of startup Preparation work, downstream pre-holiday stocking has become a necessary task. As for the preparation time, the above suggestions have been given: Due to the unexpected surge in oil prices caused by the conflict between the United States and Iran, combined with the large-scale maintenance of polyester factories, the polyester filament inventory is low and the price is difficult to fall from the high level, so you can consider buying goods early. However, compared with the procurement time, downstream weaving companies are more concerned about the issue of stocking volume. Will stocking be ready until February or March? Think about it from another perspective, what will be the price trend of polyester filament in February and March.
Looking at the price trend in recent years, the price of polyester filament is basically in a strong adjustment trend within 1-3 days after the Spring Festival. In line with the sales adjustment practice of polyester factories having a “good start” after the Spring Festival, and considering the intensive maintenance of polyester factories before and after the Spring Festival, there will be no significant pressure on industry inventories compared to the same period in previous years. In early February, the Spring Festival holiday for polyester factories has basically come to an end. In the first three weeks of February, the polyester filament market will most likely continue its traditional practice and will be in a relatively strong situation. Prices are also easy to rise but difficult to fall. Therefore, for downstream textile companies this year, raw materials Procurement until February is basically regarded as a conservative bottom line for stocking up. As for the continued expansion of post-holiday stockings, it mainly depends on the market situation of polyester filament in March, which is also a time period that most textile people are very concerned about.
Table 1 New production capacity of PTA and ethylene glycol in the first quarter of 2020
Ending the traditional “good start” transition period after the Spring Festival in February, the market adjustment trend in March will implement its fundamentals. The cost side has become the primary influencing factor. The production of polyester raw materials PTA and ethylene glycol in March this year is expected to be significantly higher than the same period in previous years. In terms of ethylene glycol: Yankuang Rongxin, Hengli Petrochemical Phase I, Zhejiang Petrochemical Phase I , Yanchang Petroleum, Xinjiang Tianye Phase IV, etc. are expected to release nearly 3 million tons/year of production capacity domestically; for PTA, Hengli Petrochemical’s 2.5 million tons/year production capacity is expected to be put into production in March. Taken together, the scale of concentrated production of PTA and ethylene glycol in March at the end of the first quarter was very large, much higher than the same period in previous years, and even much higher than the total in the first half of last year. Although there were multiple sets of PTA and ethylene glycol in the first quarter Equipment maintenance plan, but in the context of stable output of new production capacity, PTA maintenance is still difficult to alleviate incremental pressure. By then, ethylene glycol and PTA will enter a cycle of substantial inventory accumulation in the first quarter. The inventory pressure will inevitably bring about a decline in price levels and a tilt in profits. Therefore, the cost end of polyester filament is expected to be bullish but bearish.
Table 2 Polyester filament new production capacity plan for the first quarter of 2020
Unit: 10,000 tons/year
In terms of the supply and demand side of polyester filament itself, judging from Zhuochuang’s monitoring and commissioning, it is expected that the polyester filament industry will have a cumulative new production capacity of nearly 1.2 million tons/year between February and April after the Spring Festival. (including 200,000 tons of polyester industrial yarn), the production intensity is much higher than the same period in the past three years. At the same time, considering that the overall prosperity and profits of the textile industry in 2019 are lower than those in the previous two years, the downstream areas after the Spring Festival, especially in peripheral areas, The overall operating rate of major weaving enterprises may be limited. Therefore, overall, the pressure on the supply side of polyester filament may be more prominent in February and March after the holiday, and its price output is expected to be weak due to the risk of rising inventories.
Generally speaking, we expect that the market price of polyester filament will be relatively strong in February after the Spring Festival, but as March enters, the polyester raw materials PTA, ethylene glycol and polyester filament will all be released due to the release of new production capacity. There is a certain risk of inventory accumulation, and inventory pressure will drag down the industry’s price and profit adjustments to a certain extent. However, considering that the profit levels of PTA and polyester factories will not be optimistic by then, if profits continue to fall along with the increase in inventory, it may lead to centralized maintenance of PTA and polyester devices. At the same time, spring and summer orders for terminal clothing will gradually come, which will jointly ease the first quarter. supply and demand pressures. Therefore, the temporary imbalance between market supply and demand after March may gradually improve under subjective and objective control. In short, it is expected that the price of polyester filament will be strong in February, there may be a risk of loosening in March, and the market will usher in a recovery in April. increase. In response to expectations, downstream weaving and texturing companies can make appropriate stocking adjustment plans. </p
