In the first half of the year, the talk was “disgraceful”, but in the second half of the year, I felt proud! Polyester filament has made a beautiful “turnaround”!

Since the second half of this year, polyester filament production has turned a profit. According to data from China Silk City Network, as of November 7, the average profits of polyester filament FDY150D, POY150D, and DTY150D were 906, 571, and 886 yuan/ton respectively, while at the beginning of the year, the average profits of the three major polyester filament products were only 159.4 , -90.6, -10.6 yuan/ton, an increase of 468.4%, 670.6%, and 845.8%. Of course, the above are all theoretical calculations of cost and profit, and the actual cost and profit depend on factors such as the company’s inventory and sales.

In the first half of the year, the profits of polyester filament yarns were in a state of loss for a long time. For a while, the polyester factory “discolored the yarn.” However, in the second half of the year, the situation of polyester filament changed greatly. The yarn color changed in the early stage and transformed into the current star product. What is the reason that makes polyester filament so popular? The author believes that low cost, low inventory and good demand are the main factors leading to its substantial profitability.
The increase in product selling prices exceeds the increase in polyester raw material prices, and polyester production costs are low

The important reason for the sharp increase in profits from polyester filament production is that product selling prices continue to rise and exceed the price increase of polyester raw materials. As can be seen from the above figure, after entering June, the price difference between the price of polyester filament products and the raw materials PTA and MEG has gradually expanded, and the reason for the widening of the price difference is inseparable from the unilateral rise of polyester filament – in the raw material PTA , MEG prices have not increased, unilateral price increases in downstream markets are rarer than in previous years. The market will be cautious in the second half of the year, with expectations of increased PTA supply and declining demand still dominating the market, making it difficult to maintain the rising market price of polyester raw materials. According to data, the average monthly price of polyester filament POY150D/48F10 was 7,204 yuan/ton, a month-on-month increase of 4.54%. At the same time, the average price of PTA in October was 4,681 yuan/ton, a month-on-month increase of 1.69%; the average price of MEG in October was 5,391 yuan/ton, a month-on-month increase of 1.89%. Low cost has led to a significant increase in polyester filament profits, but this is only the starting point for filament profits. The driving force for filament factories to make substantial profits lies in the improvement of downstream demand after October.
Downstream demand is the driver of substantial profits for yarn factories
After the National Day holiday, the textile sector ushered in the “Silver Ten” peak demand season. Among them, the domestic sales market is relatively strong, which has led to the improvement of the export market. Coupled with the impact of Christmas order demand in Europe and the United States, export order shipments have been concentrated since October, and the comprehensive operating rate of Jiangsu and Zhejiang looms has climbed to the highest level during the year. It is the strong demand for end-use textiles that has prompted the production and sales data of polyester factories to increase in volume, and industry inventory levels have continued to decline. Currently, the mainstream inventory of polyester POY and FDY lasts 5-10 days, and the mainstream inventory of polyester DTY lasts 10-15 days. Marketable specifications such as glossy DTY75D/144F flat, glossy FDY50D/36F are even more difficult to find.

In the first half of the year, the talk was dull, but in the second half of the year, we were proud and proud! Polyester filament manufacturers finally made a beautiful “turnaround” at the end of the year! However, after entering November, Trump’s victory in the U.S. presidential election gave bulk raw materials a blow, and the OPEC oil-producing countries’ Vienna Conference will also be held on November 30. Although there are currently large differences between the parties, if an agreement is reached, international crude oil Prices may bottom out and rebound. If this is not achieved, it will put pressure on the market. At the same time, there is limited room for a correction in crude oil prices and the profit squeeze of PX is coming to an end. In the later period, the cost side of PTA will receive strong support. However, towards the end of the year, the operating rate of downstream filament weaving users is declining, and the actual purchasing sentiment is gradually sluggish. In the future market situation of “If the upstream does not fall, the downstream does not buy”, polyester filament factory inventories will rise again. How to maintain the hard-earned high profits, the author believes that polyester manufacturers may control it through their own “production reduction and load reduction” Product inventory will be the primary focus of the future market.