May to July is the off-season period for the polyester industry. However, this year, since May, the polyester operating rate has continued to rise, reaching a level of 90% in June, the highest level in the year. Polyester profit-sharing promotions and periodic terminal replenishment have caused destocking of all links in the polyester industry chain during the off-season.
May to July is the off-season period for the polyester industry. However, this year, since May, the polyester operating rate has continued to rise, reaching a level of 90% in June, the highest level in the year. Boosted by this, the demand for polyester raw materials PTA and MEG has increased, leading to significant destocking in the industry. As far as the polyester market is concerned, the phenomenon of disguised promotions by polyester factories is relatively common, and it is maintained at a time when downstream stocks are intensively replenished. Polyester factories adopt profit-sharing promotions to increase production and sales. Promotional activities of varying duration are usually carried out after a large inventory of finished products is accumulated, in order to reduce inventory and maintain stable production.
Data source: Jin Lianchuang
Among the raw materials PTA, MEG and polyester products, most of the current industrial chain adopts a contract system, so the replenishment situation is not particularly outstanding. From the perspective of the terminal weaving market, there are stages in the downstream stocking nodes. Usually the polyester yarn promotion cycle matches the stocking cycle of terminal weaving raw materials. When there is a rigid demand for terminal weaving raw materials to stock up, polyester factories usually choose two methods: price reduction promotions or stabilizing polyester prices when raw materials rise, so as to pass on profits to downstream companies. Promotions will increase polyester production and sales, ease polyester inventory pressure, and smoother demand in the downstream of the industrial chain.
The recent performance of polyester products has been weak, and the expected demand for downstream replenishment is not strong. Affected by high temperatures, some areas in Shaoxing have begun to implement orderly power management measures, and some companies require a 20% load limit during certain periods of time. The chemical companies affected by power cuts in Jiangsu and Zhejiang mainly focus on the PTA, ethylene glycol, and polyester industry chains. The impact on the polyester industry chain may first be reflected in the terminal link. However, for now, the start-up of various links in the industrial chain remains at a high level, demand has not dropped significantly, and there is still a rigid demand for replenishment in the near future.
To sum up, the polyester terminal replenishment demand is mainly reflected in the terminal weaving process. Polyester factories can well control changes in their own inventories by adopting profit-sharing and promotion methods. Especially after a large inventory of finished products is carried out, promotional activities are carried out at irregular times, which not only reduces inventory, but also stabilizes its own production. Under the current situation of high production and low inventory, it has formed a strong support for the polyester chain to a certain extent.