Last Friday, the United States suddenly imposed additional tariffs on US$200 billion of products, and China quickly took countermeasures. As a result, the exchange rate, stock market, and commodity prices almost all fell in a short period of time. The polyester industry chain is not immune to the sharp fluctuations in the domestic market, and it has become a mess.
As the PTA that “dominated” some time ago, it can be said that it is the first to bear the brunt this time.
On May 14, Zhengzhou Commodity Exchange issued risk warning letter No. 182, reminding that cotton, cotton yarn, red dates and PTA futures have experienced large fluctuations recently, and hoped that investors can do a good job in risk prevention. , rational investment.
The polyester industry chain is in chaos
PX prices are rising again Falling
PX is actually quite miserable. Ever since Hengli’s PX device was put into production in March, life has not been easy. After all, it was the “profit king” in the past. How can it be like this? What’s up?
No, after entering this week, the price of PX fell sharply again. On May 13, the price of PX external market (FOB Korea) was still 888 US dollars/ton, and on May 14 It became US$874/ton, while on May 15 it was only US$845/ton.
PTA fluctuates significantly
In the first three days of this week, PTA futures all closed with sharp declines. Among them, the main 1909 contract fell sharply by 2.2% for three consecutive days. %, 4.4% and 1.62%.
The 1907 contract even hit the intraday limit on the 14th, and the decline was still large on the 15th, with another sharp drop of 4.2% at the end of the day.
But on May 16 (Thursday), PTA futures rebounded across the board.
The spot price of PTA, which was originally “as stable as Mount Tai,” also began to dive, falling by nearly 500 yuan/ton in a single day on the 15th.
I can only say that such ups and downs are so exciting!
Polyester filament opens the downward channel again
As the downstream of the polyester industry chain, polyester filament is not immune. Since mid-April, dragged down by poor production and sales and high inventory, the price of polyester filament has been falling, by nearly a thousand yuan.
At the end of last week, polyester factories launched a wave of price reduction promotions and cleared inventory. In addition, some polyester factories began to suspend production for maintenance, and production capacity also dropped a lot. I originally thought that now that the inventory pressure is reduced, prices can always be stabilized, and I can live happily in a few days. I never expected that the entire polyester industry chain collapsed again. What else could I do? Let’s continue to drop prices.
Why is this happening?
Sino-US trade friction intensifies
The recent sudden intensification of Sino-US trade friction is the most direct trigger.
The export amounts to the United States in 2017 under Chapter HS50-60 involving tax increases are as follows:
Polyester products involve chemical fiber medium filaments and short fibers. According to my country’s export volume in 2018, direct-spun polyester staple exports were 1.03 million tons and polyester yarn exports were 2.27 million tons, of which approximately 40,000 tons were exported to the United States and polyester filament was approximately 70,000 tons, totaling 110,000 tons.
In addition to direct exports of polyester raw materials, my country’s textile and apparel exports totaled US$276.7 billion in 2018, of which exports to the United States totaled US$45 billion. The amount of tax increases included in the list is roughly around US$10 billion, accounting for 3.6%. According to the polyester output of 34.5 million tons in 2018, 20% of the downstream textile and apparel exports were exported, and 3.6% of the exports were exported to the United States. The converted demand impact on polyester is expected to be around 250,000 tons.
Comparing this data with the absolute volume of my country’s annual polyester production of 45 million tons, the actual proportion is not large.
The overall downturn in terminal weaving
Compared with the Sino-US trade friction that has attracted most people’s attention recently, the downturn in the terminal weaving market is the focus. The direct cause of the overall downturn in esters.
After mid-April, the orders received by weaving companies began to shrink significantly. Some companies said that the number of orders received in April this year was only 1/3-1/2 of previous years, while gray fabric inventory increased by half a month compared with the same period last year.
The market is so sluggish that the polyester yarn produced by polyester factories cannot be digested well, and inventories have been accumulating. The supply of PX and MEG also exceeds demand, and they have been in a long-term situation. In the downturn, only the supply and demand of PTA in the entire polyester industry chain are basically balanced, and almost all the profits of the entire polyester industry chain are eaten up by PTA.
Polyester factories “seize work and seize power”?
PTA accounts for most of the profits in the industry chain, and other links in the industry chain will naturally be reluctant.
However, with the overall downturn in terminal weaving and its own supply exceeding demand, no one has the confidence to challenge PTA.
However, as Sino-US trade friction intensifies this time, commodity futures haveThings began to fluctuate violently, and things seemed to be taking a turn for the better.
PX and MEG are “powerless”, but for polyester filament, this is not the case.
1. In recent years, my country’s polyester filament production capacity has become more and more concentrated. In 2019, Tongkun, Hengyi, Xinfengming, Shenghong, Hengli, and Rongsheng The production capacity of six companies accounts for more than half of the total production capacity, which gives leading polyester companies a strong say in polyester pricing.
China’s polyester yarn production capacity pattern in 2019
2. Recent , polyester factories have started production shutdowns for maintenance. Last week, the polyester operating rate dropped by 1.6%, while the operating rate of PTA has almost remained unchanged, and the supply and demand relationship has been slightly reversed.
3. Even if the price has dropped a bit, PTA still accounts for most of the profits in the polyester industry chain, which is not unacceptable to PTA companies.
The Sino-U.S. trade friction may become an opportunity. In the future, when there is still little improvement on the PX and MEG ends, the profit distribution of the polyester industry chain may shift from PTA’s “one-on-one” “Big” gradually changes to the “two blooms” of PTA and polyester. </p
