Although the production and sales of polyester filament factories improved slightly last week, sales were light most of the time, and polyester filament companies’ finished product inventories further accumulated. As of October 20, polyester filament POY factory inventory lasted 31.3 days, +5.03% month-on-month; FDY factory inventory lasted 31.1 days, +2.30% month-on-month; DTY factory inventory lasted 38.7 days, +2.93% month-on-month.
The data shows that the current polyester filament inventory and weaving finished product inventory are both at a high level during the year, while the number of days of weaving orders and weaving raw material inventory are at a low level during the year, indicating that the downstream industry has insufficient confidence in future market expectations.
From a profit perspective, as of October 24, the polymerization cost closed at 6,461 yuan/ton, polyester filament POY150D/48F reported 7,550 yuan/ton, FDY150D/96F reported 8,225 yuan/ton, and DTY150D/48F reported 8,925 yuan/ton. POY profit is -161.02 yuan/ton, FDY profit is 13.98 yuan/ton, and DTY profit is 175.0 yuan/ton. At present, polyester filament front-spinning products are gradually losing money, and back-end stretch yarns are also fluctuating near the cost line.
After entering the fourth quarter, under the pressure of low profits, high inventory and weak demand, combined with the early Spring Festival in 2023, news that polyester factories will enter the production reduction holiday in advance is rampant. However, since September, despite severe inventory pressure and various products falling into losses, the polyester load has always remained between 80-85%, and there has been no further load reduction. Most of the changes in equipment have been reflected in the original reduction. The restart of suspended equipment and the reduction of shutdown of new equipment are carried out simultaneously, and the fluctuation of operating load is even lower than that of upstream companies with better profits.
Polyester factory comprehensive operating rate (%)
There are many reasons why the polyester end can maintain the load without further “lying flat” at present.
First of all, although the weakness in terminal expectations is inevitable, judging from the demand transmitted directly from the downstream, the demand for polyester is actually good, even at a high level since the second quarter. After the low inventory of downstream terminals forms a new normal, the weaving end has limited margin to respond to new orders. Therefore, the upstream polyester-weaving end will naturally bear greater production pressure. On the other hand, the price of polyester raw materials in September has dropped significantly compared with July, and the pressure on the cost side of polyester has dropped sharply. For polyester factories, there is more room for price reduction and promotion, and through price-for-volume means to alleviate inventory pressure. As for the polyester factories themselves, considering that many factories have already reduced production and burden at least once in the second and third quarters, out of the need to maintain cash flow, it is not feasible to carry out maintenance at the beginning of the fourth quarter before the Spring Festival holiday. Reasonable.
The contradiction between supply and demand gradually dominates the market. Some new installations in the fourth quarter are expected to be delayed due to industry profits and other factors. However, there are still many sets of installations expected to be put into operation. Considering that demand is weak and the peak season for downstream orders has passed, it is not ruled out that downstream production will be reduced again in early December. Or take an early vacation. Cost-leading factors have weakened. On the one hand, international crude oil has fluctuated in a wide range in the short term, with no obvious positive guidance. On the other hand, macroeconomics has been negative for the global market. The weakening of demand has been expected. Therefore, the short-term polyester filament market trend requires attention to enterprises. Production reduction and destocking efforts.