Financial Associated Press, May 25 (Reporter Chen Kang) after entering the off-season of demand downstreamBlackoutbingoskillzLarge polyester factories in Jiangsu and Zhejiang agreed to reduce production in mid-May. at present, the market price of polyester filament is at a low point in half a year, and profits are still declining after the production reduction. On Thursday, large polyester manufacturers announced price increases, which vary from one company to another.
It is understood that those participating in the production reduction include Tongkun shares (601233).BlackoutbingoskillzJiangsu and Zhejiang enterprises, such as .sh), Xinfengming (603225.SH), Oriental Sheng Hong (000301.SZ), etc., have agreed to reduce production by about 10%, and the restart time is uncertain.
It is worth mentioning that around May Day, Rongsheng Petrochemical (002493.SZ), Hengyi Petrochemical (000703.SZ) part of the long-term plant transformation shutdown, involving filament production capacity reduced by about 1.6 million tons, the overall market supply has declined.
A week after the implementation of the production reduction, some market analysts told the Financial Associated Press that the situation of the production reduction was not clear. "several large polyester factories have not put the production reduction in place, and filament prices and profits are still going down, which proves that the high probability of production reduction is not enough."
(price trend of FDY, DTY and POY of polyester filament)
Reduce production, eliminate inventory, increase price and ensure profit
With regard to the production reduction and price increase, the person in charge of Xinfengming said that it was "according to our own situation". "We have about 5% of the 10% production reduction, and the current inventory is about 27 days. The price is a restorative price increase, and the discount is cancelled for manufacturers."
The person in charge of Tongkun shares told the Financial Associated Press, "as a whole, we have reduced production by about 10% according to the plan, according to the inventory of the production plant." During the meeting, both large and small factories hope to increase prices by reducing production so as to stabilize the efficiency of enterprises. The key to recovery (time) depends on whether follow-up sales are improving. "
An industry insider told the Financial Associated Press on May 24 that Hengyi had raised the price on the basis of the original price. "POY and FDY rose 600 yuan / ton yesterday."
The industry insiders also mentioned that the purpose of production reduction is to remove inventory, and the purpose of price increase is to protect profits. "Price decline does not mean bad demand, crude oil prices will also affect price fluctuations in the industrial chain." The market share of the three large factories is relatively high, and after the price increase, small factories will follow suit, and if there is rigid demand downstream, they will continue to buy. "
From the perspective of profit per ton, some varieties of polyester, such as POY, are in a state of loss in the past two months. According to Zhuochuang Information, from May 13 to May 24, profits rebounded slightly after falling, with a loss range of about 200 yuan / ton.
"these two months are very critical. In summer, it is not easy for products to be kept in the open air for a long time, and our inventory is higher than that of our peers. It is hoped that the inventory can be reduced to the normal level by the end of June," said the person in charge of Tongkun shares. "We are all at full capacity before the production reduction, and orders from downstream customers have been relatively stable, but so far this year, the overall stock removal rate is slower than we expected. If we want to return to normal inventory, the production and sales rate will reach 120% in these two months. "
According to Baichuan Information, as of May 9, POY inventory is around 28-32 days, FDY inventory is around 21-26 days, and DTY inventory is around 25-30 days.
Upstream and downstream games
After the plant maintenance of large factories and the implementation of production reduction, the price of polyester products did not improve significantly. A reporter from the Financial Associated Press learned that downstream and traders thought that prices were already at the bottom and began to stock up one after another, and there was a significant increase in downstream procurement.
According to Zhuochuang, the operating rate of polyester filament was 83.13% as of May 23 (of which melt direct spinning was around 86%). From May 18 to 20, downstream buyers focused on low prices, and the purchase volume increased obviously. the average production and sales rate at the weekend was around 180%. On Monday, production and sales reached more than 350%, and then production and sales fell to 40%, 60%. The change in production and sales rate shows that the market is not receptive to the rate of price increase.
The above-mentioned market analyst told the Financial Associated Press, "Filament production has been under high load before the production reduction, and filament production from January to April is about 30% higher than that of the same period last year, so the inventory pressure is very great, and there is a downward trend in May." After the production reduction plan, the price of polyester products did not rise, there may be a game process. "
It is worth noting that the export performance of polyester filament from January to April this year is not good, without last year's "surprise". In 2023, the demand for direct export of polyester filament in China is strong, and the annual export volume and export value increased by 24.97% and 25.92% respectively compared with the same period last year, mainly due to the improved demand for polyester filament in developing countries such as India, Egypt and Turkey. Customs data show that from January to April 2024, the export volume of polyester filament fell 7.58% compared with the same period last year.