Last week, a polyester factory production cut news touched the heart of the textile people.
Including new Fengming, Tongkun, Hengyi and other head polyester factories prepared to jointly reduce production by more than 30%, is expected to reduce output will be more than 4 million tons.
In the opinion of xiaobian, polyester manufacturers reduce production, mainly is the contradiction between high inventory of polyester enterprises and weak demand of downstream weaving enterprises, but also mixed with deeper reasons.
Profits at the back end of the chain are being squeezed
PTA price rise in the first half of the year is completely regardless of the downstream polyester industry affordability of the surreal rise. The domestic textile industry encountered unprecedented difficulties in the second quarter. The demand was depressed to the extreme while the cost soared. But PTA manufacturers can not take all the name, because the processing fee of the PTA industry in the second quarter has been reduced to -100 yuan per ton below. The rare negative processing fee means that PTA once fell into a loss in the whole industry.
First, the geopolitical crisis in Ukraine has pushed crude oil prices high, making life difficult for all petrochemical industries. But PTA raw materials - naphtha and PX relatively better situation.
Second, the United States imports a large number of aromatic hydrocarbons, such as naphtha, PX, toluene and other used in gasoline blending oil. This year, gasoline prices in the United States exceeded the historical extreme value of $5 a gallon, while hot weather and strong demand for gasoline adjustment this year severely hit the normal balance of aromatic hydrocarbon market. A large number of PX and toluene have been exported to North America, resulting in severe restrictions on the production of PTA and styrene and a sharp rise in costs.
Although its three downstream polyester terminal factory orders decline affected by the operating rate is lower than in previous years, but the range is relatively small. The negative feedback of weak terminal demand did not further affect the upstream PTA, but the pressure of imbalance between supply and demand was borne by polyester factories. The supply of polyester is on the high side and the demand is down. The start-up of upstream and downstream does not match, leading to a surge in the pressure of polyester raw materials. In addition, the production and marketing performance of polyester is light, the average production and marketing is less than 50%, and the inventory of polyester products is increasing rapidly.
It is understood that the downstream polyester industry has suffered the most serious inventory overstocking in recent years. The objective reason is that the domestic epidemic impact led to a decline in demand, but the fundamental process is the production capacity of polyester itself, the average operating rate of the industry is less than 50%. Under the imbalance of supply and demand, the inventory cycle of FDY, DTY and other varieties exceeds 30%, and the inventory cycle of POY is close to 30 days, which is far beyond the historical period. Similarly, the closer you get to the end, the more limited the price rise, and the profits at the back end of the chain are being squeezed. Polyester filament, staple fiber including weaving experienced nearly half a year of continuous losses.
