On December 3, the production and sales of mainstream polyester factories climbed to around 120%-130%, and some higher production and sales reached 200% and 250%.
On December 4, polyester production and sales dropped significantly, only around 40-60%.
Polyester filament production and sales once again staged a “one-day trip” market.
Polyester filament as textile The market for raw materials has experienced a “heavy hit” this year. It is difficult to reverse profit losses, and prices are even more common. How can the word “miserable” be used…
Although it is only the beginning of December, judging from the overall situation of the textile market this year, it seems that the end can be foreseen.
It is also the beginning of December, and polyester filament has been very prosperous in previous years
From a price point of view, the prices of various polyester filament products were at high levels in 2017 and 2018, and the price increases and decreases were not large. However, in 2019, the price focus of various polyester filament products dropped significantly, with the declines exceeding 13%.
From a profit perspective, in 2017, polyester The profits of all filament yarn products are at high levels, but this year, the profits of each product have shrunk to varying degrees, especially the FDY product, which has been in a state of loss since October, and the extent of losses continues to expand.
At present, polyester filament has “fallen into a trough”, and the reasons for its decline are nothing more than the production capacity of polyester filament itself and the cost-end PTA and downstream weaving needs have changed.
Polyester filament production capacity expansion
In recent years, my country’s polyester filament production has maintained rapid growth. In 2019, my country’s new polyester filament production capacity was approximately 3.84 million tons, with a growth rate of About 9.75%. As supply and demand increase, the polyester filament market is facing greater pressure.
Looking at this year, starting from September, The output of polyester filament has grown rapidly. The output growth rate in September was around 15.7%, the output growth rate in October was around 17.8%, and the output growth rate in November was around 13.6%. In the first half of the year, the polyester filament load was basically around 75%. After September, polyester filament manufacturers began to increase the load. As of now, the polyester filament load is around 82.7%. With increased production capacity and increased load, polyester filament yarns are under great pressure.
Collapse of cost-side PTA
PTA performance in the first half of the year It was acceptable, but in the second half of the year, PTA continued to decline, and the futures even broke through 4,700 points. As the futures continued to fluctuate, the internal price also continued to decline. As of now, the internal price of PTA is only around 4,750 yuan/ton. As the former “king” of the industrial chain, PTA once “ate up half of the cake in one bite.” Its profits reached a peak of 1,787 yuan/ton in July this year. However, PTA’s profits are currently at a loss.
PTA’s decline is also due to its continuous production capacity Expansion, at the end of October, the commissioning of Xinfengming’s 2.2 million tons PTA device once again triggered market concerns about oversupply of PTA. Not only that, my country will usher in the peak of PTA production from 2020 to 2021. It is expected that a total of 14.4 million tons/year will be put into production, accounting for about 29% of the production capacity at the end of 2019. The expanding supply surface makes it difficult for PTA prices to rise, and the cost end of polyester filament collapses.
Insufficient demand in the weaving market span>
The consequences of overcapacity have caused weaving manufacturers to “suffer a lot” this year. Inventories are high, profits are shrinking, demand is weak, and production reductions, production suspensions, and bankruptcies occur frequently. Until September and October, although the market recovered, However, there is still little effect, and the purchase of polyester filament is basically just in need of replenishment. As of now, at the end of the year, orders from weaving companies have basically come to an end, and looms have begun to make inventories. In addition, all receivables have not yet been recovered. Due to financial pressure, the demand for polyester filament is not strong.
But according to the usual practice before the Spring Festival holiday every year, weaving companies must have a wave of stocking up on polyester filament. However, in view of this year’s market conditions and the uncertainty of next year’s fashion trends, it is expected that the stocking volume will not be larger than in previous years.
PTA cannot give polyester.To support the cost side of polyester filament, weaving companies cannot provide support to the demand side of polyester filament. There is a reason why the polyester filament market cannot strengthen this year… In the recent stage, the tension between China and the United States, which is the biggest negative factor this year, has further increased. As the market heats up, it is difficult to say that the market will be good next year. With all parties weakening, the chance of polyester filament reversal may not be great.
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