Since the third quarter, prices in the polyester industry chain first increased and then decreased, and are currently on a downward trend from a high level. In July, polyester raw materials PTA and MEG were among the top increasers, while downstream staple fiber prices were relatively limited. In August, polyester prices fell one after another, with PTA and MEG among the top decreasers. Short fiber prices were relatively resilient. On the cost side, the overall center of gravity of crude oil has shifted downwards, with WTI crude oil trending weaker after hitting a high in the past six years; the cost of ethylene glycol coal is relatively strong, and the price has increased significantly in the early stage driven by costs. However, downstream short fiber cash flow continues to suffer losses, and factory production reductions have left profit recovery momentum. On the whole, the profits of the polyester industry are expected to be redistributed, and the industry arbitrage opportunities of shorting PTA and MEG and longing short fiber can be grasped.
High processing fees are difficult to maintain
Since the second and third quarters, polyester The market has experienced multiple unexpected factors such as weather speculation and typhoon closures. The price of polyester raw materials has also gone through a roller coaster, moving out of an inverted U-shaped trend. Along with the weakening of crude oil prices from high levels and the release of supply-side production capacity of PTA and ethylene glycol, polyester prices have remained weak recently. From the perspective of industrial processing fees, the PTA processing difference has recently fallen back to around 600 yuan/ton, after once rising to 800 yuan/ton. Judging from the historical average level, it is more reasonable for PTA processing fees to remain around 400 yuan/ton. The high processing fees have attracted the participation of short-selling hedging to a certain extent. At the same time, crude oil prices may show a wide oscillation trend, cost support and news interference gradually weaken, and the upward momentum of PTA far-month contract prices is slightly insufficient.
MEG will still be under pressure to fall back in 2020-2021 my country’s ethylene glycol production capacity is concentrated on the launch cycle. In 2020, the new domestic MEG production capacity was 4.65 million tons, and it is expected that the new production capacity will reach 6.9 million tons in 2021; as of August 2021, the total MEG production capacity has increased to 19.69 million tons, of which the coal-based MEG production capacity is about 7.25 million tons. In August, more domestic devices were restarted than repaired, and the overall supply increase was limited. Judging from the rhythm of supply and demand, the ethylene glycol market maintained a slight accumulation of stocks in August, and expectations for an increase in ethylene glycol supply from September to October are still high, and the pressure on far-month contracts will gradually return.
The picture shows the trend of PTA processing fees (yuan/ton)
Since the third quarter, the ethylene glycol market has experienced an increase in maintenance plans and delays in the commissioning of new equipment. Typhoons have caused port closures in East China, and delays in overseas arrivals have disrupted the ethylene glycol inventory accumulation expectations in the third quarter. At the same time, as coal prices rose again, the spot price of ethylene glycol in Zhangjiagang rose to 5,600 yuan/ton in late July before falling sharply in August. In September, with the mass production of Gulei’s new device, domestic supply will increase significantly. It is expected that the accumulated ethylene glycol inventory in September will be 70,000-80,000 tons, and MEG price pressure will be obvious.
Industrial profits are expected to be redistributed
my country’s textile and clothing industry in 2021 The industry is expected to maintain a moderate recovery. Domestic expectations for textile and clothing consumption in the third and fourth quarters are relatively optimistic. The total annual growth rate is expected to be around 11%, and the month-on-month demand growth rate in the second half of the year is expected to be 7%-8%. For textile and apparel exports, it is still expected to benefit from improved overseas demand, with exports expected to increase by around 17% month-on-month.
The picture shows the price trend of the polyester industry chain (yuan/ton)
At present, the polyester industry has gradually entered the traditional peak demand season of the Golden Nine and Silver Ten. The current overall profit of polyester is still below the profit and loss line. Although the profits of filament have been restored, short fiber is still in a loss-making state. In July, polyester raw material prices were strong, short fiber cash flow continued to weaken, and spot cash flow dropped to -150 yuan/ton. Cash flow continues to suffer losses, and some factories have increased maintenance plans or postponed restarts. The pressure on the supply and demand side of short fiber is not great before the fourth quarter. Stimulated by demand, there is power to expand profits.
In late August, in terms of polyester operating rate, major polyester manufacturers have begun to jointly reduce production. At present, the four major polyester factories have a designed production capacity of 20 million tons, which will reduce production by about 20%. The operating rate will be affected by about 5%. The operating rate is expected to be reduced to around 86%. Polyester production starts have declined, coupled with peak season demand expectations, polyester product prices are expected to rebound.
Therefore, from the perspective of the entire polyester industry, industry chain profits are expected to be redistributed in the fourth quarter. Under the wide oscillation pattern of crude oil, the cost support of upstream polyester raw materials PTA and MEG has weakened, and the price focus of polyester raw materials has shifted downward. Superimposed on the downstream peak season demand expectations at the end of the third quarter, the price focus of polyester product filament and short fiber is expected to rise, and the industry Profits may be transmitted from upstream to downstream. </p
