In 2019, the polyester filament industry experienced ups and downs. In the first half of the year, dragged down by high inventory, prices continued to decline. The market improved slightly in the middle of the year. However, the good times did not last long. In the fourth quarter, ethylene glycol turned against the wind. , heavy cost pressure hit us, and the demand side encountered a cold in advance, and polyester filament was in a deadlock at the end of the year. After experiencing high inventory and high pressure at the beginning of the year, the inventory of polyester filament companies has been controlled within a safe period. With the decline in weaving operations, polyester filament companies have also reduced their load and run. They hope to “pack light” in 2020 and have a good start after the Spring Festival.
In the long-short game of the polyester filament market before the holiday, we mainly analyze the market situation from the following aspects:
Attention Point: low inventory
Figure 1 Weekly inventory trend of three major polyester filament models
Looking at the whole year, polyester filament inventory mainly has two peaks and three troughs. The first trough appeared before the Spring Festival. At the end of the year, companies reduced their burdens and avoided risks, and offered discounts and promotions before the holiday. The destocking effect was significant. The price trend of polyester filament during the month also showed a state of first declining and then rising. The price difference between high and low during the month was 350 yuan. /Ton. The second trough appeared at the end of June. After the downturn in the first quarter, polyester filament companies had high inventories. It was heard that some companies’ inventories were piled up outside the factory, making capital turnover difficult.
Figure 2 Polyester filament enterprise inventory comparison in 2018-2019
Since May, polyester filament companies have started promotion mode, and inventory has dropped rapidly. By the end of June, the industry’s overall inventory has dropped by 18-19 days month-on-month. Correspondingly, prices have also continued to increase. In early June, the focus of negotiations on polyester filament POY150D/48F was around 7,450 yuan/ton, while in early July the price was raised to 8,900 yuan/ton, with a price difference of 1,500 yuan/ton.
According to this logic, low inventory is an important driving force for the rising market. At present, the inventory of the polyester filament industry is at a low level. Companies still say that they still have plans to promote destocking at the end of the year and hope that there will be inventory at the end of the year. Controlling the level within a week, even if there is a certain accumulation of inventory during the Spring Festival, overall, there will be little inventory pressure on polyester filament companies after the Spring Festival.
Focus: low load
The above table shows the recent statistics on the maintenance of polyester filament equipment. In December, the production capacity of the equipment was reduced by about 2.4 million tons. Before the Spring Festival, the maintenance capacity involved was about 4 million tons. In addition, the shutdown equipment in the early stage has not been restarted. Taken together, as of Before the Spring Festival, the polyester filament yarn maintenance capacity accounts for more than 20% of the country’s total production capacity, and the start-up is expected to drop to around 78%.
Figure 3 Comparison of operating loads of polyester filament devices in 2018-2019
However, compared with 2018, the construction start-up in 2019 is still at a higher level, and the maintenance intensity at the end of the year is far less than the same period last year. Therefore, the low construction start-up in 2019 is not really low.
At present, directly downstream of POY, the opening of the texturing plant industry has dropped to around 76%, and the opening of chemical fiber weaving is around 64%. Specific to the main application areas of polyester, Shengze water jet loom The start-up rate is about 73%, and the start-up rate of water-jet looms in Changxing area has dropped to around 60%. Therefore, compared with downstream, the load of polyester filament is still at a high level, so the contradiction between supply and demand in the industry is highlighted.
Focus: low profits
Figure 4 Profit trend of mainstream polyester filament models
As can be seen from the above figure, the trends of POY and FDY are quite similar. Starting from the second half of the year, the trend of DTY diverges from POY and FDY, and the trends deviate. Especially since the fourth quarter, FDY has continued to lose money. Since December, affected by the news of flight closures, the price of ethylene glycol has skyrocketed and plummeted. However, polyester filament has been unable to follow up, and the company has digested part of the increase on its own, so profits have gradually shrunk or even suffered losses. At the end of the year, with the decline in raw materials, the profit level of polyester filament has a tendency to improve, but FDY is hovering near the break-even line, the cost pressure of enterprises is highlighted, and the willingness to increase after the holiday is urgent.
The recent trade negotiations between the two countries have continuously released good news, so some companies plan to increase slightly after the Spring Festival. However, the polyester filament market is still in a gaming situation, so the risk of rising prices is greater. It is understood that at present, companies with low inventory plan to make a smooth transition before the holiday and are mainly waiting and watching. A small number of companies still have high inventories and plan to have preferential promotions before the holiday. Under the guidance of the current mentality of “taking it easy”, companies are mostly “packing light”. The market situation next year is expected to be better than that at the beginning of 2019, but it is not yet known whether the market will rise as expected.
</p
