Introduction: In the first half of 2021, the polyester staple fiber market experienced ups and downs. The market price hit a new high in February, but then the price began to fall and adjust; the profit performance was even more disappointing. In the first half of the year, polyester staple fiber made good profits. It turned to losses and inventory continued to accumulate. So in the second half of the year, how will the polyester staple fiber market perform under the multiple contradictory news of high oil prices, new production capacity waiting to be released, and expected global demand recovery?
1. Market review in the first half of 2021
Source: Longzhong Information
Table 1: Direct spinning staple fiber in 2021 Regional price statistics unit: yuan/ton
Source: Longzhong Information
In 2021, the overall polyester staple fiber market will show a trend of first rising and then falling, mainly due to changes in the basic supply and demand side.
The first stage: a good start to the new year and prices rising all the way
Due to the additional production cuts announced by Saudi Arabia in early January and the implementation of the Biden administration’s US$1.9 trillion stimulus package, which boosted market confidence, and buyers are generally optimistic about expectations after the Spring Festival, short fiber traders and downstream customers have more stocks. Factories were severely oversold, and spot prices also rose sharply. Secondly, at this stage, some short fiber companies have entered equipment maintenance, and the overall supply of the market is tight, which has helped the price of short fiber rise; thirdly, the weakening of the basis after the Spring Festival has attracted a large number of arbitrageurs to buy. The demand is well coordinated, the buying momentum is high, and the market price Along the way, it reached the highest price of 8,000 yuan/ton during the year, an increase of 34.01% from the beginning of the year.
The second stage: supply and demand imbalance, prices fall back from high levels
One , the Suez Canal ship stranding caused a blockage in the river, as well as the worsening of the global epidemic and the obstruction of vaccination, the surge in U.S. bond yields, the strengthening of the U.S. dollar, and the slowdown in procurement of independent refineries in China, which have intensified the market’s concerns about short-term demand and dragged down the market. The overall short fiber market trading mentality.
Secondly, the imbalance between supply and demand is obvious. Many companies have restarted due to maintenance and repairs in the early stage, and the industry’s operating rate and output have increased. In addition, the performance of terminal orders has been unsatisfactory, and corporate inventories have accumulated significantly. Short fiber Prices fell back from their highs.
The third stage: weak demand and price fluctuations within a narrow range
Inflation Global stock markets fell due to worries, and against the background of weakening macroeconomic expectations such as the continued deterioration of the epidemic in India, the overall commodity market fell into a correction, and the purchasing intentions of yarn and non-woven companies were relatively weak, which had a certain impact on the market. Market prices Return to pre-Spring Festival levels. Even though cash flow has shrunk significantly, some companies have entered maintenance mode, and crude oil has started a strong upward trend in mid-June and the aggregate cost performance has been strong, but due to the lack of motivation to increase demand and the influence of a bearish mentality, it is difficult for the market to rise or fall sharply, maintaining 100-200 Yuan/ton range fluctuates.
2. Analysis of polyester staple fiber supply and demand data from January to June 2021
2.1 Supply analysis from January to June 2021
The supply increase of direct spinning staple fiber in my country from January to June 2021 is limited, of which the new production capacity is only 80,000 tons , and all of them are hollow staple fiber production capacity. Although the actual output has increased significantly year-on-year, it has declined by 6.05% compared to the second half of last year.
Production Capacity Analysis
Direct spinning polyester staple fiber in the first half of 2021 A total of 80,000 tons of new production capacity have been added. As of the end of June, the industry’s total production capacity was 8.121 million tons, an increase of 0.99% from the end of 2020.
Table 2: Statistical table of direct spinning polyester staple fiber production capacity and output changes from 2020 to 2021 Unit: 10,000 tons
Note: The production capacity in 2020 is based on the end-of-year data, and the output is from January to June; the 2021 data is based on the national total production capacity as of the end of June, and the output is Data from January to June.
Looking at the specific production companies, only two companies were involved in new additions in the first half of the year, and the types of production were all hollow staple fiber production capacity, while there was no new cotton production capacity. See the table below for details:
Table 3: Statistical table of new direct spinning polyester staple fiber production capacity in the first half of 2021 Unit: 10,000 tons
Source: Longzhong Information
Output Analysis
The output of direct-spun polyester staple fiber from January to June 2021 totaled 3.5325 million tons, a year-on-year increase of 17.31%.
Figure 2: Comparison of direct spinning polyester staple fiber output and operating rate
Source: Long Public Information
Although there was not much new production capacity in the first half of the year, due to the epidemic in the first half of last year, the operating rate of enterprises was low, especially in the first quarter of last year, the industry operating rate was as low as 50 Below %, the industry operating rate in the first quarter of this year is generally high. Except for the centralized maintenance period during the Spring Festival, the industry operating rate in other time periods is above 90%.�It is the reduction in the ability to stock raw materials.
Figure 8: Changes in finished product inventory days of pure polyester yarn companies
Source: Longzhong Information
4. Profit analysis of direct spinning polyester staple fiber from January to June 2021
Figure 9: Comparison of staple fiber price and profit trends in 2021
Source: Longzhong Information
2021 The average profit of polyester staple fiber in the first half of the year was 297.18 yuan/ton, a year-on-year decrease of 36.52%. Let’s look specifically. In the first quarter, affected by continued oversold factories and strong cost support, polyester staple fiber prices continued to rise, and market participants were generally optimistic about expectations after the Spring Festival. The market gradually accepted high-priced supplies, and cash flow also increased accordingly. In the second quarter, the spot price of polyester staple fiber fell sharply. The previous continuous rise caused panic in the market. Coupled with the obstacles in the vaccination process, the surge in U.S. bond yields, the strengthening of the U.S. dollar and other factors, it dragged down the market trading mentality. Furthermore, The slow return of the basis difference has led to low supply of goods at some point prices, which has led to sluggish market buying and polyester staple fiber cash flow has also shown a downward trend.
5. Trend forecast of direct spinning polyester staple fiber from July to December 2021
Supply Forecast
There are three plans for new polyester staple fiber production capacity in the second half of the year, as shown in the table below:
Table 4: China’s direct spinning polyester staple fiber (conventional) new capacity production plan from 2021 to 2023 Unit: 10,000 tons/year
Source: Longzhong Information
However, it is difficult to determine the time when the new production capacity will be put into production, and the actual production estimate is limited, which will have an impact on the market. The actual impact is expected to be limited, so supply in the second half of the year will mainly focus on monitoring the dynamics of existing factory equipment.
Figure 10: Forecast of direct spinning polyester staple fiber output in the second half of the year
Source: Longzhong Information
Currently, there may be maintenance plans for two sets of equipment with a total of 400,000 tons in Jiangyin in July. Therefore, there are also plans to restart multiple sets of maintenance equipment in July. Over the years, the maintenance of short-fiber equipment has been concentrated during the Spring Festival holiday. Therefore, if there are no other unexpected events, the operation of short-fiber equipment will be relatively stable in the second half of the year. However, the time when new equipment is put into operation will have a greater impact on industry supply. The overall estimate is that output in the second half of the year will be higher than that in the first half.
Demand Forecast
Generally speaking, in the second half of the year, there will be traditional The domestic trade peak season of “Golden September and Silver Ten” is also scheduled to start from July to August, so the industry demand in the second half of the year is expected to be higher than that of the first half.
Figure 11: Forecast of domestic demand for direct-spun staple fiber in the second half of 2021
Source: Long Public Information
In general, there will be less new polyester staple fiber production capacity in the second half of the year, and the actual increase in supply is expected to be limited, so the supply of short fiber is expected to be The year-on-year increase in volume is not much. Due to the expected recovery of global demand and the low-cost advantage brought by integrated equipment, direct-spun staple fiber is expected to continue to use its own advantages to expand market share. Judging from the market situation, the impact of high oil prices and high costs from July to September is still likely to continue to rise, but we must also pay attention to the impact of the actual arrival of terminals on the market. During this period, the market may fluctuate up and down, but the overall focus may be Maintain an upward trend; however, as the domestic supply pressure of raw materials increases in the fourth quarter, the market must also be wary of the risk of price fallbacks caused by possible declines in costs. </p
