In recent years, the polyester market has been rising, and 2023 is the highest year for the expansion of the polyester industry chain, creating a new record of increased production capacity. According to market news, the total polyester production capacity in 2023 is as high as 79.465 million tons, of which 9.81 million tons of new production capacity (30 sets of new polyester devices), 2.84 million tons of long shutdown devices, and 2.03 million tons of old production capacity. In 2024, there are still a number of delayed new units put into operation, and it is expected that the new polyester production capacity will be as high as 9.46 million tons in 2024.

In the face of increasing production capacity, can the market digest it smoothly? Monk meat less situation gradually emerged, polyester industry will usher in a big reshuffle?

Raw material side: Production surge to a new high, there is a surplus crisis?

The main raw materials of the polyester industry chain are PTA and ethylene glycol, which are downstream products of crude oil, and their prices fluctuate with the volatility of crude oil.

Ethylene glycol:

In 2023, the overall price of ethylene glycol fluctuated between 4100-4300, and rose to 4300 yuan/ton during the gold period, and fell sharply. Due to the recent rebound in crude oil, the ethylene glycol market has shown a slight improvement in performance, with an increase of 50 yuan/ton. It is expected to benefit from the upward adjustment of crude oil, ethylene glycol can rise slightly, and maintain stability between 4100-4200 yuan/ton.

PTA:

Due to crude oil turmoil, OPEC+ production cuts and PX supply problems, PTA moved higher, including high prices in April and September. But then due to the downstream inventory is sufficient, buying general, back up the increase during the year, as of the press offer of 5675 yuan/ton, down nearly 800 yuan/ton from the September peak. In addition, the processing difference continues to decline, the PTA processing difference will reach the lowest point of 20 yuan/ton in the year, and most of the time the processing difference is between 250-400 yuan/ton. Recently, crude oil prices have been repaired, and PTA processing has gradually recovered, but PTA production capacity is relatively excess, new production capacity continues to be released, and the upstream PX center has moved down, and PTA is still expected to decline.

PTA future new production capacity is still more, and the upstream and downstream growth rate is difficult to match, PTA production capacity is still excess, industrial profits will be mainly concentrated in the PX and polyester ends, and PX in the industrial chain strong position is difficult to change. At the same time, PTA in the context of overcapacity, PTA industry will continue to accelerate the elimination of backward production capacity through low processing differences.

Demand side: elimination + maintenance, mainstream product demand decline!

The main products of polyester are polyester filament and polyester staple fiber, accounting for more than 65%, which can be subdivided into polyester filament POY, polyester filament FDY, polyester filament DTY and staple fiber, 76% of the products are mainly supplied to the terminal clothing textile industry, the production capacity is mainly distributed in Jiangsu and Zhejiang regions, followed by Fujian, Guangdong and other places.

Overall, polyester mainstream products recently showed a stable state, Jiangsu and Zhejiang mainstream factory shipment intention is positive, but the upstream raw materials fell significantly, downstream procurement to just need to be cautious trading, the overall market trading is cold, the overall weak operation.

In recent years, polyester filament head enterprises concentrated capacity expansion, polyester filament supply continues to hit a new high, is expected to increase the annual output growth rate by 17.64%. As of the beginning of December 2023, the new capacity of polyester was 10.79 million tons, with a capacity growth rate of 14.65%. It is expected that in the case of some capacity maintenance and new capacity production at the same time, the capacity utilization rate is still near 85%, and the industry still maintains a high supply operation.

Terminal: Export growth decline, difficult to top new capacity!

Terminal textile and garment demand has been suppressed by the epidemic, the global economic downturn and the peak of the inventory cycle, and has entered a medium-low growth state. The impact of high temperature power rationing, Jiangsu and Zhejiang terminal construction decreased significantly, downstream polyester load picked up, orders are still weak, and downstream polyester filament is in a high inventory state.

From the export data point of view, this year China's textile and garment export growth significantly downward, it is difficult to digest the huge increase in polyester production.

From the perspective of domestic demand market, according to the data of the National Bureau of Statistics, the total retail sales of social consumer goods in China from January to October 2023 was 85440 trillion yuan, with a year-on-year growth rate of 6.9%. Among them, the retail sales of clothing, shoes, hats, needles and textiles above quota were 881.93 billion yuan, up 10.2% year-on-year. However, it is worth noting that the nominal growth rate of domestic textile and clothing consumption is higher, mainly due to the impact of the low base in the same period last year. If based on the same period in 2021, the two-year compound growth rate of the total domestic textile and clothing retail sales is only 1.2%, which is still far lower than the two-year compound growth rate of polyester production of 6.2%. Therefore, the low growth rate of domestic demand for textile and apparel is difficult to carry this year's polyester production increase.

Polyester industry chain forecast 2024!

As far as the current situation is concerned, the overall supply and demand of the polyester industry chain are weak, and the polyester industry is subject to the high cost of upstream raw materials. It is expected that by the impact of overcapacity in 2024, the profit of the polyester industry chain may be further compressed. However, due to the impact of policy, environmental and other factors, it is expected that the elimination capacity of polyester filament in 2024-2025 will be between 2 million and 2.5 million tons, and the export volume in Southeast Asia will increase, the negative capacity growth of the industry is coming, and the supply of polyester plate is strongly supported, and is expected to continue to rise.

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Fujian ZhangpingXielong Group High-tech Chemical Fiber Company Co., Ltd. leading products of include:nylon thermal fuse, TPU special filament, polyester thermal fuse, TPU hot melt omentum, PA hot melt omentum,.The company has always adhered to the 3s core service tenet: "saving time, cost savings, saving losses", advocates a total of industrial value, and is committed to providing a better solution for the overall industrial chain. Plan, welcome to buy the nylon thermal fuse，polyester thermal fuse!