Since April this year, filament prices have been basically at 7,500 yuan/ton. During promotions, the price of filament is 200-300 yuan/ton, and the production and sales rate increases sharply by 300-700%. On weekdays, when there is no promotion, the production and sales rate is around 30%. The following two pictures clearly show this pattern. The filament price curve is almost a straight line, and the production and sales rate has ten obvious upward convexities, corresponding to the ten promotions since April.
Then we are going After thinking about it, why is this a pattern? In the past, the initiative in polyester production and sales was in the hands of downstream textile mills. When they knew that polyester stocks had reached a high level, they would buy at lower prices. At this time, although the production and sales ratio of upstream companies is very good, their profits are not high. However, in recent years, polyester production capacity has been continuously concentrated on CR6, especially CR3 (Tongkun, Hengyi, Xinfengming). In addition, last year’s epidemic objectively eliminated a large number of backward small production capacities (as shown below). Currently, the initiative in polyester production and sales has been controlled by industry giants. CR3 controls the rhythm of production and sales rates, so it will not blindly reduce prices to expand. Sale.
Compared with the price and no market of high-profit filament yarn in March, the long-term growth since April The high profits of silk have been effectively implemented. And after experiencing the test of ultra-high inventory of 40-50 days during the 2020 epidemic, industry giants are now much more tolerant of inventory days. As long as polyester can maintain a high price difference and companies in the industry maintain high synergy, losses will no longer occur.
What is the industry synergy of polyester companies? Leading polyester companies will study and judge the needs of downstream textile companies from time to time. Secondly, in the past, the dozens of textile bases and factories downstream of one of its own companies were regarded as a game of chess to avoid internal fights within the same “group”. Now the polyester head companies come together into one whole. There are countless varieties of polyester filament, and Tongkun Co., Ltd. is also known as the “Wal-Mart of filament”. In the past, it would flexibly adjust between different varieties to achieve the highest level of profitability. However, several large polyester manufacturers now negotiate with each other and maintain relatively fixed varieties and do not compete with each other for the market, in order to maintain high price differences and profit levels. Judging from the trend of filament prices and profits since April, the industry’s high synergy has undoubtedly been effectively implemented.
Affected by the epidemic, terminal demand at home and abroad has not returned to normal levels. However, the profit level of polyester products at this time has exceeded that of 2019. This is due to the increase in industry concentration and the increased synergy of industry giants. According to the disclosed information, CR3’s production capacity will gradually exceed 10 million tons in the next three years, and its market share will reach 70%. Industry concentration and synergy will further increase. As downstream demand recovers, high-level profits will be consolidated and consolidated. expand further.
According to the research report on the refining and chemical industry by Guojin Securities, the currently disclosed production expansion information shows that all new production capacity comes from leading companies. With the large refining and chemical leaders With the expansion of the company’s second-phase project, the raw material cost advantage of leading companies will continue to be amplified. Coupled with the cost advantage brought by scale, the polyester filament industry has established high industry barriers and will become increasingly difficult to shake.
(PTA production increase table, Wind)
(Polyester filament production increase table, Wind)
Let’s focus on the demand side again. Affected by the epidemic in the first half of 2020, demand for textiles and clothing at home and abroad fell sharply. From January to July, the cumulative retail sales of knitted textiles for clothing, shoes and hats decreased by 17.5% year-on-year. Looking at single-month data, the retail sales of knitted textiles for clothing, shoes and hats from February to April The amount dropped significantly. After entering the second half of the year, as the domestic epidemic was brought under control, overall demand gradually recovered, and textile and apparel demand has recovered significantly since August. In the second half of the year, domestic clothing and textile export business gradually recovered. Citing Chinese customs data, domestic clothing and textile exports in October 2020 were US$24.85 billion, a year-on-year increase of 8.7%, of which clothing exports increased by 3.7% year-on-year and textile exports increased by 14.8% year-on-year. From January to October 2020, the cumulative export volume of domestic clothing and textiles was US$240.6 billion, a year-on-year increase of 7.0%. Among them, the cumulative export volume of clothing fell by 11.5% year-on-year, and the cumulative export volume of textiles increased by 30.5% year-on-year.
Based on comprehensive judgment, the inventory duration of polyester filament has rebounded significantly compared with the bottom of the previous boom, and the current national cloth trading volume continues to pick up, which to a certain extent shows Global terminal consumption continues to recover, the prosperity of the textile-polyester industry chain is expected to continue to rebound, and the profit prosperity of the entire refining-polyester industry chain is expected to gradually return to the central level or the peak of the economy. </p
