Yesterday, the news of “double explosion” swept the entire polyester market. News 1: It is reported that due to the impact of “dual control” of energy consumption, Shaoxing Keqiao issued a notice yesterday to implement power reduction measures for high-energy-consuming enterprises, involving 161 enterprises such as thermal power plants, printing and dyeing plants, and polyester factories. As an important printing and dyeing town in China, the printing and dyeing enterprises in Keqiao Binhai began to stop operations one after another last Sunday, and all stopped yesterday morning. It is expected to continue until the end of the month; customers have been notified of delayed delivery of fabric orders. News 2: It is reported that a 2.5 million tons/year PTA unit in Fujian has reduced its load operation for some reason, and the recovery time has yet to be tracked. Although it has entered the traditional peak season of “Golden Nine and Silver Ten”, the continued increase in “dual control” and changes in upstream production equipment have made it difficult for the polyester market to improve. Will the “dual control” factor continue to ferment in the future? Is the peak season of the “Golden Nine and Silver Ten” of the entire polyester industry chain worth looking forward to? These all affect the sensitive nerves of the market.
The impact of “dual control” on the polyester market in Jiangsu and Zhejiang regions has escalated
“On the first day after the Mid-Autumn Festival, news about printing and dyeing parking in Jiangsu and Zhejiang markets spread in the market. According to CCF news, all dyeing factories in Binhai, Changshu, Nantong, northern Jiangsu and other places in Shaoxing were shut down, and Wujiang dyeing factories were about half open (open for 2 minutes and stop for 2 minutes) (in batches); Changxing is currently in a parking state, and plans to partially resume operations on the evening of the 22nd. Haining will limit production by about 50%.” Pang Chunyan, analyst at SDIC Anxin Futures, said that in addition to downstream weaving, printing and dyeing, the start-up of polyester plants is also affected by Affected by the impact, the four companies Tiansheng, Hengming, Jinxin and Juxing have a total production capacity of 2.5 million tons. They were confirmed yesterday and began to be implemented. The overall production limit is around 50%, but some companies have already moderately reduced production in the early stage. In addition, some medium and large texturing companies and chip spinning companies are also involved in production restrictions.
In fact, since mid-September, news about the increase in the “dual control” policy in Jiangsu and Zhejiang has been circulating in the market. First, the Rudong area in Nantong, Jiangsu has limited restrictions on September 10. According to the news of the power outage, the local area is dominated by air-jet and rapier looms. It is an important cotton spinning base, and there are also some chemical fiber-related water-jet looms. Afterwards, Jiangyin, Yancheng and other places also began to receive notices of power rationing. Related control news also came from places such as Jiaxing and Huzhou in Zhejiang. Before the Mid-Autumn Festival, the scope of power restrictions in Jiangsu has been further expanded, and water-jet weaving companies in Siyang, Shuyang, Huai’an and other places have successively received notices of power restrictions. Some textile factories have posted notices that they will be on holiday from September 22nd to October 8th.
“As Jiangsu region has a PTA production capacity of 11.24 million tons and ethylene glycol production capacity of 2.98 million tons, Zhejiang region has a PTA production capacity of 20.45 million tons and an ethylene glycol production capacity of 2.85 million tons, accounting for both It is relatively large, and the market is also paying close attention to the dynamics of PTA and MEG units in Jiangsu and Zhejiang.” Pang Chunyan said that as of now, the 4 million tons of Honggang Petrochemical and the 2.2 million tons of Jiaxing Petrochemical PTA units have been shut down for some reason. A total of four companies, including Lianlian 500,000 tons, Yangzi BASF 340,000 tons, and Satellite Petrochemical 1.8 million tons, reported that they may be affected by the “dual control” policy to reduce production and suspend production.
The “dual control” of energy consumption in Jiangsu area turns on the “red light”, and the control upgrade will begin in mid-September; the “dual control” of energy consumption in Zhejiang area turns on the “yellow light”, and in September Control was significantly upgraded in the second half of the month. The production capacity of polyester-related chemical fiber textiles and printing and dyeing in Jiangsu and Zhejiang is concentrated. The textile printing and dyeing industry with high energy consumption is greatly affected, followed by polyester, and upstream raw materials are also affected.
According to CCF statistics, on September 22, the load of the polyester device was around 84%, down 2 percentage points from last Friday, and there is a possibility of further decline; texturing started at 58 %, down 27 percentage points from last Friday; the loom operation is about 44%, down about 19 percentage points from last Friday; the comprehensive printing and dyeing operation in Jiangsu and Zhejiang is around 23%, a sharp drop of 43 percentage points from last Friday’s 66% operation . Overall, the polyester industry chain from PTA, MEG to terminal textile printing and dyeing has been affected to a certain extent. The farther toward the terminal, the wider the scope of the impact, and the greater the amount involved.
“The ‘dual control’ overweighting has directly caused great negative effects on the polyester market. Compared with the entire polyester industry chain, it is expected to have the greatest impact on the terminal weaving and polyester links.” New Lake Futures analyst Chen Xi said that the load situation learned yesterday is also the same. The printing and dyeing load in Jiangsu and Zhejiang dropped from 66% before the holiday to 23%, the loom load dropped from 63% before the holiday to 44%, and the polyester dropped from 86% before the holiday to 84%. In terms of raw materials, the production capacity of small-scale PTA devices in Jiangsu and Zhejiang is 12 million tons, and 6.7 million tons have not been stopped, accounting for 10% of the total production capacity. If “dual control” continues to be strengthened in the future, the room for polyester load reduction will be larger, followed by PTA, and MEG will be smaller.
In Pang Chunyan’s view, the impact of “dual control” is reflected from raw materials to demand, but the impact on upstream raw material supply is less than downstream demand, so the performance of polyester raw materials yesterday was biased. weak. “Although there are rumors that Fujian PTA equipment will reduce its load, PTA futures still fell significantly after the opening, which shows that the negative effects of shrinking short-term demand have prevailed.”
The short-term impact will continue
The reporter learned that polyester production was reduced and suspended due to the impact of dual control. The scope of impact is the concentration of production capacity in Jiangsu and Zhejiang, and the impact time is from Mid-September lasts until after the National Day holiday, which coincides with the traditional peak season of the textile and garment industry.
“Although the order performance during this year’s peak season was poor and there was still no significant improvement in mid-September, exports may have been completed ahead of schedule under the pressure of rising sea freight. However, the domestic ‘Double Eleven’ ‘It is still an important sales window period, and the later the period is, the more likely it is that orders will recover.” Pang Chunyan said,The orders for 2019 appeared intensively at the end of September, manifesting as concentrated urgent orders. This year, all aspects of upstream raw materials have been fully prepared for the expected peak season, but the order performance is average. The production limit in September will reduce output to a low level. Once peak season orders are reflected in October, it will accelerate the digestion of inventory in all links and be conducive to the restoration of profits in the industrial chain. “As for whether the peak season of the ‘Golden Nine and Silver Ten’ is worth looking forward to, currently we don’t have high expectations for exports, and domestic consumption is relatively weak, but window promotion orders are still worth looking forward to.”
During the interview, the reporter learned that the “dual control” policy affects the entire industry chain, but overall, the further downstream, the higher the energy consumption and the greater the impact, which is negative for the raw material market.
According to Hongye Futures analyst Zhang Yongge, after the second quarter, polyester cash flow fell sharply, and inventories were also rising. In mid-August, polyester manufacturers began to Scale production reduction. Recently, the “dual control” of energy consumption has become stricter, and polyester and terminal companies have been affected. Under the “dual control” policy, the start-up schedule of new polyester production capacity has also been delayed, which has exerted a short-term drag on raw materials.
In Pang Chunyan’s view, after the production reduction and suspension, if peak season orders recover, it will help to destock the industrial chain, thus reversing the trend of weak demand, rising inventories, and falling profits. Negative feedback pattern. “PTA is mainly affected by concerns about shrinking demand in the short term, but after profits are squeezed to lows, cost support will appear and the amount of equipment maintenance in October will be large, which will still be the driving force for future rebound.”
“For the polyester industry chain, the current load of printing, dyeing and weaving is already at a low position, while polyester still has room for decline. For PTA, the subsequent load may also decrease, but the reason may not be ‘dual control’ It’s about active load reduction caused by excessive costs and weakening demand. Ethylene glycol is more complex than PTA, and the shortage of raw coal and the strength of foreign natural gas bring strong support.” Chen Xi said.
“From the PTA side, spot processing fees have dropped significantly in the past month, causing many manufacturers to conduct maintenance in advance. Since mid-September, Honggang Petrochemical and Tongkun Petrochemical have and Fujian Baihong for maintenance or load reduction, the PTA market is in a situation of both supply and demand reduction, and the reduction in demand is greater.” Zhang Yongge said that if the polyester terminal production restrictions continue in the later period, some PTA manufacturers cannot be ruled out Possibility of early maintenance. Against the background of narrowing demand, PTA processing fees may be further compressed, and the absolute price will also show a weak oscillation trend. The market outlook needs to further observe the start-up trend of polyester and terminals. </p
