Polyester staple fiber trend in the first half of 2022
In the first half of 2022, the price focus of polyester staple fiber will gradually shift upward during adjustment. Energy tensions, the Russia-Ukraine war, the epidemic lockdown and production cuts, the inflation crisis, etc. gathered in the first half of the year, all of which gradually pushed the overall price focus of polyester staple fiber upward. In particular, the price of crude oil and polyester raw materials rose sharply due to the Russia-Ukraine war in March, and there was a strong upward trend in June due to energy shortages and inflationary pressures. In mid-June, it soared to a maximum of around 9,200 yuan/ton. , and then fell back to the level before the surge due to concerns about “recession” in trading. As of the end of June, the focus of negotiations on polyester staple fiber in Jiangsu and Zhejiang was around 8,500-8,600 yuan/ton, which was an increase of about 1,500 yuan/ton from the beginning of the year, an increase of about 21%.
After entering January, as the prices of crude oil and polyester raw materials continued to rise, the price of polyester staple fiber was driven by costs, coupled with the downstream stocking demand near the end of the year. The overall price focus of short fiber also gradually increased, and polyester factory inventories gradually shrank to Low prices, and the maintenance plans of some factories at the end of the year are gradually implemented, supporting the upward trend of short fiber prices. During the Spring Festival, foreign crude oil prices rose sharply, which led to a good start in the domestic post-holiday market. The price of the staple fiber market jumped by 300-400 yuan/ton after the holiday. However, after the price increase, the market initially had a slight increase in buying but not a buying down. The mentality of bargain hunting appeared, but it did not persist for two days. When demand could not follow up, the overall price showed a gradual and slight downward trend.
However, after entering March, the Russia-Ukraine war broke out, which caused crude oil to rise and fall, causing wide fluctuations in the entire polyester raw material end. The polyester staple fiber market was affected by the cost side, and also saw a rise and fall trend. In addition, due to the intensification of the domestic epidemic in the downstream, there has been a lack of orders, limited logistics, and continued sluggish demand, which has suppressed the entire polyester staple fiber market. Staple fiber manufacturers have begun to limit production and protect prices due to negative cash flow and inventory accumulation, and the domestic epidemic has begun to impose partial lockdowns. Control management, logistics restrictions, and overall production reductions have gradually intensified. Especially during the May Day period, the EU’s sanctions on Russian oil caused crude oil prices to continue to rise, and the cost side of polyester raw materials was supported strongly. During the May Day period, the epidemic was discovered in Jiangyin. Huahong shut down all its operations and temporarily closed-loop production in the city under closed management. Other short fiber companies are also facing the risk of parking and are unable to deliver goods. The overall supply has been significantly reduced. The price of polyester staple fiber has surged again due to the impact of cost and supply.
After the Dragon Boat Festival, driven by the surge in crude oil and PX, the price of polyester raw materials further pushed up. Driven by the cost side, the price of short fiber also rose strongly. However, downstream weaving demand is still weak, and yarn mills have low purchasing intentions amid high inventories. Resistance to high prices has increased significantly, and pressure for higher prices continues to accumulate. Subsequently, under the negative macro factors such as the Federal Reserve’s interest rate hike, the market began to trade in an economic “recession”, showing a rapid downward trend from highs.
2. Changes in production capacity, operation conditions, and import and export dynamics of the polyester staple industry
As of the end of June 2022, the polyester staple fiber production capacity will be 9.19 million tons. Among them, the devices calculated as being within the production capacity but currently not in operation include the original Far East 200,000 tons (stopped at the end of March 2015), Shandong Huahong 120,000 tons, and Shandong Chenghuijin 150,000 tons. The remaining devices that are not in operation are not included in the production capacity. .
Table 1 Changes in equipment in 2022 Production capacity: 10,000 tons
Figure 2 my country’s polyester staple production and production load from January to June 2020-2022 (unit: 10,000 tons%)
According to CCFEI statistics, from January to June 2022, my country’s total polyester short-circuit output was approximately 3.23 million tons, a decrease of 11.02% compared with 3.63 million tons in the same period in 2021; the monthly load average was 72.8%, which was 72.8% higher than that in 2021. It was 86.7% in the same period, a decrease of 13.9 percentage points.
In the first half of 2022, affected by the Spring Festival holiday in January and February, some polyester factories were shut down for maintenance. Most factories such as Hengyi, Desai, Sanfangxiang, Yizheng, Huaxi Village, Jingwei, Youcai, Jinzhai Xinlun, etc. There are successive shutdowns for maintenance or production reduction. Then in April and May, domestic epidemic control restricted logistics in Jiangsu, Zhejiang and Shanghai, affecting raw material supplies and product shipments. Jiangyin, an important short fiber production base, was also under closed management, resulting in major local polyester staple fiber manufacturers such as Huahong. All parking, Sanfang Lane is half-stopped and closed for operation, etc., resulting in a further decrease in the overall polyester staple fiber operating load. In addition, in the first half of this year, due to the crazy increase in raw material costs, short fiber cash flow generally showed negative values, and manufacturers generally had low enthusiasm for starting operations despite losses. The overall operating rate of polyester staple fiber in the first half of the year was significantly lower than the same period in previous years.
According to CCFEI statistics, from January to May 2022, the total import volume of polyester staple fiber (including recycled short fiber) was 38,200 tons, a decrease of 38,800 tons, or 50.39%, from 77,000 tons in the same period last year; during the same period, polyester staple fiber imports decreased by 50.39%. Ester polyester staple fiber (including recycled short fiber)�The total export volume was 407,500 tons, a decrease of 19,900 tons or 4.69% from 424,700 tons in the same period last year.
Figure 3 my country’s import volume of polyester shorts from January to May 2018-2022 (unit: 10,000 tons)
As shown in the figure above, from January to May 2022, my country’s overall import volume of polyester short fiber (including recycled short fiber) decreased significantly compared with last year. Monthly import volumes are lower than the same period in previous years.
As shown in the figure above, in the first five months of 2022, my country’s export volume of polyester staple fiber (including recycled staple fiber) was generally slightly lower than the same period last year. From January to March, it was lower than last year, but it began to appear in April. rebounded and was higher than the same period in history. Mainly due to the relative recovery of foreign epidemics, some downstream textile sectors in Vietnam, Bangladesh and other places have more orders, and some demand for raw materials comes from my country, resulting in increased exports.
As shown in the figure above, the top ten countries in my country’s polyester short-sleeve export destinations from January to May 2022 are basically the same as in 2021. Judging from their proportions, Vietnam, Pakistan, Indonesia, the United States and other export proportions have all increased. The reduction, especially in Pakistan by 2.25 percentage points, is mainly due to the superposition of China-U.S. issues due to the epidemic this year. Exports to the United States, India and other places have significantly reduced. After the proportion of major countries has shrunk, the overall distribution has become more dispersed. The proportion of other countries obviously increase.
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