Currently, China’s chemical fiber industry has been and will continue to become an important source of high-quality listing resources for my country and even the global securities market. The group characteristics and trends of China’s chemical fiber listed companies are changing day by day. They have experienced pain, cultivation, redemption, adjustment, transformation, acceleration… and their industry investment value is also increasing day by day.
“In the first three quarters of this year, affected by the epidemic, insufficient demand from the downstream consumer market was a major challenge facing the textile industry. The prosperity of the chemical fiber industry will inevitably decline. Polyester goes on the market The companies are basically large enterprises and need to ensure the continuous production of the equipment. Although there are good production and sales ratios in certain periods, overall they face greater inventory pressure.
From the perspective of specific enterprises Judging from the situation, since this year, companies that have implemented a balanced upstream and downstream integrated development strategy earlier have shown good competitive advantages and risk resistance in coping with this severe market situation.” A polyester industry insider said explain.
Falling product prices and insufficient demand have doubled the pressure on enterprises
The epidemic is the main factor affecting the operation of the polyester market this year. At the same time, crude oil prices have fluctuated sharply. It also continues to affect the “nerve” of the market.
In the first half of the year, affected by the COVID-19 epidemic, demand in the textile downstream market shrank severely. At the same time, factors such as sharp fluctuations in international oil prices have superimposed. The main raw material of PTA and polyester products is crude oil. The price drop caused by the drop in oil prices is gradually transmitted from the front end to the downstream. The price of polyester products has declined to varying degrees in different time periods, and the overall price has been in the low price range for many years. Coupled with inventory accumulation, the profitability of polyester products has come under heavy pressure.
Another polyester industry insider said that from January to February, affected by the traditional off-season during the Spring Festival holiday and the sudden outbreak of the domestic epidemic, companies basically focused on fighting the epidemic. After March, the domestic epidemic was gradually effectively prevented and controlled, but international crude oil prices plummeted, which was transmitted downward to PTA, ethylene glycol and polyester filament, resulting in continued decline in filament prices, shrinking transactions, and rising inventories. After entering the second quarter, my country’s epidemic situation has been basically effectively controlled, the internal circulation market and domestic consumption fundamentals have recovered, and the fundamentals of the polyester industry have gradually begun to recover. After April, international oil prices fluctuated upward after experiencing a sharp drop, which provided certain support for the cost of chemical fiber. The trading volume of polyester filament increased and the price rebounded slightly. Overall, in the first half of the year, insufficient demand was still the biggest problem facing the polyester industry.
Take polyester filament as an example. Looking at the operating rate, according to statistics from China Fiber Network, from January to June, the operating rate of this industry was 78.6%, 55%, and 77.4% respectively. , 83%, 89.1%, 91.4%. In this regard, industry insiders pointed out that the polyester industry has gone through multiple rounds of reshuffles, especially the polyester filament industry, with high market concentration. Although the equipment of large-scale polyester enterprises has also arranged certain maintenance, it is basically necessary to ensure continuous operation, and the operating rate is obviously higher than that of the downstream.
In contrast, due to the different sizes of enterprises and the large number of small and medium-sized enterprises, the downstream weaving industry as a whole has been severely affected by the epidemic. Coupled with insufficient purchasing demand from terminal retail brands, the operating rate of the weaving industry was obviously insufficient in the first half of the year. According to statistics from China Fiber Network, from January to June, the operating rates of looms were 8%, 28%, 56%, 50%, 70%, and 65% respectively.
From the perspective of product prices, taking DTY150D spot product as an example, from January to June, its monthly average prices were 8935 yuan/ton, 8773 yuan/ton, 7930 yuan/ton, 6766 yuan/ton, 7003 yuan/ton, 7181 yuan/ton.
Since the third quarter, the overall operation of the industry is still recovering, but the impact of the epidemic is still continuing. In terms of operating rates, according to China Fiber Network statistics, from July to September, the operating rates of the polyester filament industry were 91.7%, 90.7%, and 92% respectively; while the operating rates of the downstream weaving industry were 61%, 65%, 70%. Through comparison, it can be found that in the third quarter, although the operating rate of the weaving industry improved to some extent compared with the first half of the year, it was still insufficient.
Looking at product prices, still taking DTY 150D spot product as an example, from July to September, its monthly average prices were 6593 yuan/ton, 6630 yuan/ton, and 6479 yuan/ton respectively. , the price is in a low range. “At the end of September, polyester stock levels were still at a high level.” The person in charge of the sales department of a polyester filament company in Jiangsu told reporters, “Since the beginning of this year, the prices of raw materials and polyester products have fluctuated significantly, which has made the company’s inventory management more difficult and also It has increased the risk of losses due to inventory depreciation and caused certain fluctuations in the gross profit margin of the company’s products.” A research report from Everbright Securities also showed that in the third quarter, the average price of polyester filament POY fell by about 220 yuan from the second quarter. / ton, the average price of FDY fell by about 290 yuan / ton compared with the second quarter.
However, it is worth noting that after the National Day, the domestic textile market experienced a boom, and the operating rate of downstream weaving mills increased significantly. As the enthusiasm for downstream purchasing heats up, the polyester market begins to experience continued high volume, and inventories are significantly reduced. With the support of the demand side, polyester factory quotations have gradually increased, and cash flow has turned losses into profits.
Data from China Fiber Network shows that in early October, polyester��The project’s refining products and chemical products achieved sales revenue of 9.046 billion yuan and 1.542 billion yuan (external sales amount) respectively; Hengyi Brunei achieved revenue of 11.493 billion yuan and net profit of 564 million yuan, and its competitive advantage continued to improve. “Since the beginning of this year, Brunei’s refining and chemical projects have adhered to a low inventory strategy and timely increased diesel production and reduced aviation kerosene production in accordance with market demand, which has greatly resisted the impact of external risks.” Hengyi Petrochemical stated in the announcement.
According to Hengyi Petrochemical’s previous announcement, the second phase of Hengyi Brunei Refining and Chemical Project will also build a crude oil processing capacity of 14 million tons/year, 1.5 million tons/year ethylene and 2 million tons/year PX production capacity. After the second phase of the Brunei refining and chemical project is completed and put into operation, Hengyi Petrochemical will add an “ethylene-propylene-polypropylene” industrial chain, which will help improve the intensification, scale and integration level of Brunei’s refining and chemical projects; it will also be beneficial to The integrated, globalized and balanced coordinated operation of Hengyi Petrochemical’s industries, products and assets.
Shenghong Group is currently fully promoting the construction of refining and chemical integration projects. The scale of the Shenghong refining and chemical integration project is 16 million tons/year of oil refining, 2.8 million tons/year of paraxylene, 1.1 million tons/year of ethylene, etc. It is expected to be put into operation by the end of 2021.
In fact, from 2019 to 2020, one of the biggest features highlighted by the competition in my country’s polyester industry is that large leading companies have deeply implemented the integrated refining and chemical development model. Three private refineries have Chemical plants were put into operation one after another. Although this year has been affected by the epidemic, the company’s strategic thinking is clear, and project commissioning and new project construction are proceeding at full speed.
The above-mentioned polyester industry insiders said: “With the release of PX production capacity in private refining projects, large leaders are focusing on building ‘crude oil-aromatics (PX) and olefins-PTA and MEG- The deeply integrated development model of polyester-spinning-texturing has continuously achieved high-quality and efficient large-scale production, reduced costs, and enhanced overall risk resistance. Moreover, relying on the advantages of integration, leading companies have also continued to expand. It is hoped that It can seize the new share of future market demand. At the same time, as the old small and medium-sized production capacity in the polyester market gradually withdraws, the market share of ‘head’ companies continues to increase, and the degree of concentration of the polyester market further increases.”
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