In recent years, the polyester industry has changed a lot: the production capacity has accelerated, and the polyester production capacity has exceeded 50 million tons in 2018. The capacity utilization rate has increased. Since 2016, the polyester operating rate has been continuously improved, and the weak season has been weakened. In the first three quarters of 2018, The average load of polyester is above 90%; the structure of polyester industry is adjusted, and the concentration of production capacity is improved. Leading enterprises rely on capital advantages, new production capacity is continuously released, and mergers and acquisitions of peer companies are launched.
There are more than 80 enterprises in the polyester filament industry. At present, the expansion of polyester filament yarn is mainly concentrated in leading companies such as Tongkun, Xinfengming and Hengyi, and the production capacity is still concentrated in large enterprises. With the further increase in capacity concentration, the voice of polyester will be further enhanced.
2018 polyester market review
In the first half of the year, the overall trend of polyester products fluctuated mainly; after the upstream PTA rose first and then fell, the price of polyester products in the second half of the year was first suppressed. In the first half of the year, the profit of polyester and polyester production was good. The profit of polyester bottle production was particularly bright. The overseas demand for bottle tablets was blown out. The supply and demand of domestic bottle pieces were tight, which pushed the price up. The profit of polyester bottle production reached 2,500 yuan/ Ton.
In the third quarter, the profit of polyester and polyester production fluctuated greatly. From July to September, the prices of polyester and polyester products rose, but the increase was less than the increase of PTA during the same period. The pressure of rising polyester and polyester costs was difficult to shift downward. Its production profit has been greatly reduced, and some varieties have suffered large losses. In the middle and late September, with the rapid decline in the spot price of PTA, the profit of polyester and polyester production improved, and the production profit of some varieties reached a new high in the year. In the fourth quarter, polyester production and sales remained at a low level, demand was obviously weakened, and polyester filament stocks accumulated rapidly, reaching the high point after the Spring Festival, further reducing the price of polyester, and the profit of polyester production was once again compressed.
2019 polyester market outlook
In 2019, the capacity/yield growth rate may be reduced: from the current planned production capacity, the planned production capacity in 2018 may be delayed by 780,000 tons. We assume that production will be completed in April-June next year, and 6.85 million tons will be planned in 2019. We assume that 1/2 of the production capacity can be opened, and the production capacity is evenly distributed in April-December, so that the expected capacity increase is 7.8% in 2019, and the output growth rate is 4.67%. If 2/3 of capacity is put into production, it is expected that the capacity growth rate will be 9.9% in 2019 and the output growth rate will be 5.81%.
The demand for textile and apparel in 2019 is at risk: more than 70% of polyester terminals are related to textiles and garments. Therefore, it is necessary to judge the strength of polyester demand according to the sales situation of textiles and garments. Since textile and apparel are daily consumer goods, their general trend is highly correlated with China's overall economic status. From the historical data, China's round of economic cycle lasted about four years. The current cycle began in the second half of 2016, and has been in the second half of the current period, and has entered the second half of the down cycle, so textile and apparel domestic demand will remain weak before the first half of 2020.
Terminal investment or slowdown in 2019: From the point of view of fixed assets investment in the terminal textile industry, it has a certain correlation with the profits of industrial enterprises. This can also be confirmed by the number of new types of terminal texturing machines. The machine is still relatively small, but the bombing machine has exploded in 2017-2018, but it is expected that the number of newly added bullets will return to the low level again in 2019.
The Sino-US trade war in 2019 is an uncertain factor: the first round of the Sino-US trade war, the $50 billion tax on goods is basically not involved in the textile and garment industry. The second round of the 200 billion tax collection list covers most textile raw materials, semi-finished products and a small number of clothing accessories. The textile and apparel products involved in the United States exported about US$4 billion to the United States in 2017, accounting for about 10% of Chinas total exports of textiles and clothing to the United States. Domestic textile and garment enterprises have responded to the transfer of entrepot trade and production capacity to Southeast Asia, and the impact of trade wars has not yet been reflected in the data. In 2019, the downside risks of the world economy have increased, China's foreign trade environment has become more severe, and export shocks have been concentrated in the first half of the year.
Polyester boom or end in 2019: Polyester boom has fallen after reaching a high point in 2010. After the low boom period of 2012-2015, the dawn of 2016, the polyester has been gone for nearly 3 years. The boom cycle, with the rapid release of polyester production capacity, and the terminal investment slowdown, while the terminal demand is under pressure inside and outside, it is expected that the polyester boom will weaken in 2019.
All in all: the downstream production in 2017-2018 grew rapidly, the terminal demand rebounded, and the industry replenished the inventory cycle to reach a high point. Although the capacity of polyester to be placed in 2019 is still large, the polyester industry will decline in the context of overall demand decline. Polyester production may end at a high rate of more than 10% for two years. It is estimated that the growth rate of polyester production will be around 6-8% in 2019, and the risk of continued sharp decline in demand is expected.
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