Observation of the inventory levels of upstream and downstream products in the polyester industry chain found that in the second quarter, all links entered the destocking channel, and the inventory levels of each product were at low or neutral levels. However, as polyester profits return to the downward channel and active destocking on the product side is coming to an end, polyester product inventories are expected to turn from falling to rising, and the negative feedback of demand will gradually be transmitted upward, which will leave less room for product and raw material prices. The willingness of the supply side to actively adjust in the next month will be an important observation point for price changes.
Generally speaking, inventory levels can reflect the current supply and demand status of a product, thereby further predicting whether the product will face tight or loose supply and demand through the direction of inventory changes. At the same time, the observation of historical data shows that inventory and price have an obvious negative correlation. Monitoring inventory is an important aspect in determining price trends. Taking the inventory level of each product in the polyester industry chain as an observation angle, observe the position of each polyester product from the inventory level, and then speculate on future product price trends.
PX continues to destock, and the recent price rebound has strengthened support for downstream costs.
Judging from the fundamentals of PX itself, active adjustment on the supply side is the main factor affecting the PX market. Starting from late April, PX entered seasonal maintenance, which lasted until mid-to-late May. After that, some devices were restored, and the PX operating rate reached a maximum of 80.39% in early June. However, since mid-June, the operation stability of domestic PX equipment has been poor. Two large PX plants in East China have unplanned operation with reduced load, and supply is expected to be tight. Overall, PX has been in a state of destocking since April, and the current inventory level is at a relatively low level in the past five years. This is a key factor in the recent price rebound and provides certain support for downstream PTA prices.
PTA supply and demand are both strong, and inventory levels are at the mid-range level.
Downstream PTA production is currently gradually picking up, and with the implementation of new production capacity, output in May reached 5.28 million tons, a record high. However, affected by the high start-up of downstream polyester, demand has also increased compared with the previous period. In the comparison of the same period in the past five years, the inventory position is in the middle, and the inventory level is at the mid-range level. From the perspective of inventory pressure, the industry’s supply and demand situation is relatively healthy. However, it has recently been affected by the PX negative impact again. Profits are concentrated on the PX end, causing PTA processing fees to fluctuate at a low position recently. In the case of low processing fees, the possibility of negative reduction in the future cannot be ruled out.
Profit recovery coupled with low inventory levels, polyester production starts at high levels
The polyester product side has been affected by the rebound in profits and continued destocking. Since May, the comprehensive operating rate of polyester has continued to rebound and is at a high position compared to the same period in the past five years. On the other hand, destocking has remained stable even with the operating rate close to 90%, especially for polyester filament. The inventory is at the lowest level since the same period in 2020. The main reason is that polyester products have not followed the rise in the context of the recent rise in PTA, and It chooses to promote profits and stimulate production and sales by exchanging price for volume to control inventory. Downstream manufacturers take the opportunity to stock up, causing polyester production and sales to grow rapidly and inventory levels to continue to decline. The periodic demand for stocking has caused polyester products to enter the active inventory reduction stage under the fundamental pattern of strong long-term supply and weak demand. It can be said that the polyester segment is in a virtuous cycle in the short term.
Summarizing the above three links, it can be concluded that in the polyester industry chain, PX is affected by supply-side adjustments, and supply expectations are weak, while downstream PTA is affected by the launch of production capacity and stable operating rates, and the output reaches a record high. For PX The demand for PX is strong, and the PX market is in a pattern of weak supply and strong demand; in the polyester product segment, polyester manufacturers are affected by the rebound in profits in the early stage to maintain high operating rates, and at the same time use profit-sharing promotions to stimulate production and sales and actively destock, PTA and polyester They are all in a market pattern of booming supply and demand.
In terms of inventory changes, PX and polyester have been in a continuous destocking channel in the past two months. The current inventory levels are low. The PTA inventory changes are smaller and the overall direction is different from the first two. The inventory levels are neutral. From the perspective of time period, polyester product destocking started earlier, followed by PX. This is related to the macro background of strong expectations and weak reality in the first half of the year. Downstream products are better able to feel the reality of weak market demand, and thus are more sensitive to the reality of weak market demand. Enter the active inventory removal channel early.
Negative demand feedback is accumulating, polyester profit is the core indicator
Judging from late June and the next month, the profits of polyester products have entered a downward channel, and the space for profit-sharing and promotion methods has shrunk. It is expected that the downstream phased replenishment will come to an end, with more rigid demand being the main focus, and the probability of product prices rising is low. big. The active destocking of polyester products is coming to an end, and the inventory level is likely to turn from a decrease to an increase. However, there is still a long way to go between inventory accumulation and industry load reduction. First, the current low inventory makes the industry have a certain degree of resilience, and second, the overseas polyester load The decline has made domestic polyester exports tend to be positive in the short term. For polyester…Maintaining high operating conditions will provide certain support. For upstream PTA, the decline in downstream profits and the accumulation of inventory will form a certain expectation of weakening demand, resulting in less space above the price, and there is a high probability that the current trend will maintain slight oscillations in June. With output continuing to reach new highs and strong supply, whether current prices can be maintained smoothly through the traditional off-season in the next month will depend on the industry’s willingness to actively adjust supply, which will become the main factor affecting prices.
</p
