In the first nine months of 2019, my country’s polyester output was approximately 37 million tons, an increase of approximately 2.92 million tons compared with the same period last year. The cumulative year-on-year growth rate was close to 8.5%. Although it was not as good as the previous two years, the overall growth rate was still relatively high. level.
In terms of polyester load, the overall operating rate of the industry this year has dropped significantly compared with the same period last year. Among them, the load in the first quarter was at a seasonal low, about 83.6%, which was significantly lower than the same period last year; The overall load in the second quarter was at a high level, reaching around 91.5%; the load in the third quarter dropped slightly from the second quarter, but still reached a level of more than 90%.
Figure: Polyester factory unit load
1. Polyester import and export situation
According to customs data, polyester export volume exceeded 5.3 million tons in the first eight months of this year, accounting for nearly 16.3% of total domestic production. The growth rate is as high as 17%, with exports increasing by nearly 780,000 tons compared with the same period last year. The important source is filament export, with a growth rate of about 16%.
In terms of imports, the import volume of polyester in the first eight months was close to 820,000 tons, with a growth rate of about 30%, mainly due to the substantial increase in chip imports. This also explains to a certain extent why market entities generally feel that terminal demand is weak this year, but actual polyester output and demand have performed well.
The reason behind the significant growth in polyester exports this year is not only the rigid growth of overall peripheral demand, but also the strong comprehensive competitiveness of the overall Chinese polyester industry. The substantial growth in imports is mainly due to the lagging impact of chipping. This is related to the lagging impact of the adjustment of recycled import policies in recent years. Previously, recycled materials were blocked from the country due to environmental protection policies. However, with the establishment of cleaning and processing plants in third-party areas, In the second half of last year, it began to re-enter the country in the form of slices, and the import volume of slices has further increased significantly this year.
2. Polyester profit and inventory situation
In terms of profit, the overall profit of polyester in the first nine months was good, but Weaker than last year’s performance; from the perspective of major representative polyester varieties, profit differentiation is more obvious, which is basically consistent with the corresponding supply and demand situation.
Figure: Polyester cash flow trend
Specifically, filament profits fluctuate greatly and have obvious structural differences. Among them, FDY has good profits in the first quarter, but its profits are not good after April and are close to break-even; while POY has good profits most of the time, and during the Spring Festival and Profits are poor around May, and DTY varies depending on the type of enterprise. The profits of small and medium-sized texturing factories are far less than those of large melt direct spinning factories. Slicing profits are acceptable, with no significant difference from previous years, and mostly fluctuate around low profits.
Picture: Polyester inventory days in Jiangsu and Zhejiang regions
In terms of inventory, polyester product inventories in the first nine months of this year mostly fluctuated around the mid-range level. Among them, polyester inventory reached small peaks twice in early March and mid-to-late May; while in the rest of the period, polyester inventory mostly fluctuated in low areas, especially after June, when inventory fell to historically low levels.
3. Polyester downstream market analysis
This year’s domestic demand data for end-use textiles and clothing is weak, and the retail sales of textiles and clothing are growing. The speed has hit a multi-year low. Textile output has barely grown, and the output of clothing in some samples has even experienced significant negative growth. Correspondingly, the growth rate of consumption in the whole society and the economic growth rate have dropped to multi-year lows. The weakness of total economic demand is reflected in the textile and clothing industry. The performance is more obvious in the terminal field.
In terms of textile and clothing exports, the performance of clothing export data is weaker than that of the past two years, and the negative growth is expanding, while the export data of textile yarn products is still growing, but the growth rate is higher than that of the past two years. It also dropped significantly, and the overall textile and clothing exports weakened significantly.
Figure: Year-on-year growth rate of national textile and clothing exports in 2019
The demand for terminal textiles and clothing is weak, which is concentrated in the weaving gray cloth link in the industrial chain. This year, the inventory in the weaving link has climbed significantly to a high level and has been difficult to see a significant decline. Of course, the weakness in the weaving link is not only related to the weakening of demand growth. The significant excess of supply and demand caused by the substantial expansion of weaving production capacity in the past two years is a more important factor.
Judging from the observed data, the weaving load this year has been significantly reduced due to profit and inventory suppression, but it still cannot significantly improve the operating pressure of this link. This also reflects the current situation of the weaving link to a certain extent. The level of surplus is very serious.
4. Polyester output and demand forecast in the fourth quarter
For the next four quarters, polyester output and demand In terms of demand performance, what needs to be considered is the seasonal change in demand rhythm brought about by the Spring Festival. The Spring Festival will be earlier (late January 2020). The current downstream inventory is high, especially the high gray fabric inventory of weaving companies, and operating profits are also high. Not good, downstream companies may have an earlier holiday, and polyester will face a crisis after mid-November.The problem of gradually weakening demand.
In terms of polyester production assessment, polyester output in the fourth quarter is expected to be close to 12.6 million tons, with a year-on-year growth rate of approximately 7.6% in the quarter. For the whole year of 2019, the growth rate of polyester output is expected to be around 8.3%. The overall output growth rate is more optimistic than the output growth rate at the beginning of the year. The incremental contribution from exports and incremental inventory contributions are both higher than previously expected. </p
