Polyester Industry Into "Cold Winter" Deficit Enterprises Increased By 90% Over The Same Period

In this round of upstream production capacity expansion of chemical fiber, it is bound to squeeze out a number of backward devices with profits.

The polyester industry entered the "cold winter": total profit decreased by 38.07% compared with the same period last year, and the deficit of deficit companies increased by 90.85% over the same period last year.

National Bureau of statistics data show that: 1~9 months, the main business income of chemical fiber industry 639 billion 800 million yuan, an increase of 4.04% over the same period, and realized a total profit of 20 billion 200 million yuan, a decrease of 29.1% compared with the same period last year. The industry's deficit reached 24.42%, an increase of 3.95 percentage points compared with the same period last year, and the deficit of loss making enterprises increased by 67.32%. The operation quality of chemical fiber industry is generally stable, but the profit rate of the industry has declined. In 1~9 months, the operating profit margin was 3.16%, down 1.48 percentage points compared with the same period last year.

According to the industry, the total profit of the polyester industry is 10 billion 20 million yuan, a decrease of 38.07% compared with the same period last year, and the nylon industry is 2 billion 430 million yuan, a decrease of 15.79% compared with the same period last year.

Table 42019 1~9 month chemical fiber industry economic benefits

At the same time, the subdivision data of the polyester industry is also supporting the collapse of the market. Since the beginning of this year, the profits of POY and FDY have dropped sharply, except for the small profits of DTY. FDY's disk processing profit has narrowed below the profit and loss line. And almost from the beginning of October, the profits of filaments are constantly dropping, and constantly refresh this year's low position.

Capacity expansion brings bitter fruit, and market demand is cut.

Of course, upstream chemical fiber capacity expansion is the main reason for the low profit of the whole industry, but the market demand has also been supplemented by a knife.

Polyester terminal 70% is related to textile and clothing, so it is necessary to judge the strength of polyester according to the sales situation of textile and clothing. Because textile and apparel belong to daily consumer goods, its general trend is highly correlated with the overall economic situation of China GDP. From historical data, China's economic cycle lasted about 4 years. The current cycle began in the second half of 2016 and has been in the downlink cycle for the second half of the three year period. Therefore, domestic demand for textile and clothing will remain weak.

In the foreign trade market, for the textile industry, the trade relationship between China and the United States has been affecting the textile market. With regard to the weak foreign trade orders this year, most of the enterprises' responses are influenced by foreign trade policies, especially the Sino US trade relations. Many textile bosses say that they dare not pick up orders in the US market this year. Under the circumstances of Sino US trade war, many other countries have also made adjustments to customs duties. Therefore, tariffs are also an important factor affecting the order of enterprises.

Since this year, the domestic market demand is weak, so it is difficult to make substantial changes. The situation of foreign trade is also general, and the loneliness of domestic sales also affects foreign trade to a certain extent. This year's downstream textile enterprises are also not comfortable enough. To a certain extent, this is a heavy blow to polyester enterprises.

In addition to the domestic market, the demand for polyester in Asia is also decreasing. According to ICIS reports, polyester demand in Asia will continue to slow down because most downstream devices have completed year-end orders, and the replenishment of goods is less active at this time. A major producer said: "the end of the year is usually off season, so we expect that the polyester market will not rebound." The main exporters had to sell prices because the downstream devices were not keen on replenishment.

At the same time, polyester manufacturers are facing a situation of rising inventories. Yarn manufacturers' inventories increased from 10-24 days a week to 11-25 days, while fiber producers' inventories increased from 7-12 days to 6-13 days. The producer said: "inventory increases mean consumption slowdown". Polyester producers in India and Southeast Asia are also cutting production in the face of sluggish demand. A India manufacturer said, "our sales are slow and buyers are not in a hurry to place orders."

Demand has not been put into production, and the future polyester industry will be blocked and long.

All in all, 2019-2020 years of polyester industry and polyester raw materials industry production capacity is still concentrated, but the overall demand has not changed significantly, still need to continue to pay attention to Sino US trade progress and exchange rate trend, the external uncertainty has not yet been eliminated, demand is still down risk; future polyester filament or polyester industry will face a more severe test. (source: ICIS, National Bureau of statistics, network)