Views: 14 Author: Site Editor Publish Time: 2019-03-07 Origin: Site
Price of polyester industrial yarn gradually stabilized after declined obviously in Nov, and profit of PIY kept high during most of 2018 except for Nov, with annual profit to be higher than that in 2017. Although PIY market is supposed to welcome capacity startup peak in the next 2 years, the PIY market still deserves anticipating, which may have a balanced supply/demand pattern and sound profit.
Price of PIY edged up stably in Jan-Oct, 2018, hitting 5-year high, and the profit was tolerable. The average cash flow of the high-tenacity 1000D is estimated to be around 3,871yuan/mt in 2018, up by 799yuan/mt compared with 3,072yuan/mt in 2017, while different plants will have various performance, only for reference, and the profit of differential products was higher.
Price of PIY greatly dipped in Nov, and feedstock cost was falling. Profit of PIY was squeezed to around 2,000yuan/mt now with bigger decrement than feedstock, while the yearly cash flow of PIY in 2018 is expected to be higher than that in 2017.
Operating rate of PIY plants was relatively stable in 2018, with the low level appearing in Spring Festival on turnaround and peaked at Jun-Aug, and the O/R change was mainly due to the turnaround in some mainstream big units like Guxiandao and Unifull.
With the approaching of 2019, mainstream plants gradually released holiday schedule for the Spring Festival. Hailide has started turnaround in Dec, and Unifull plans to have maintenance in Jan 2019, while other plants do not plan to have turnaround temporarily. PIY plants are expected to adjust run rate throughout 2019 to keep balanced supply/demand after domestic capacity continued rising.
Many plants have added capacity or plan to expand capacity with high profit of PIY, and PIY capacity is expected to rise rapidly in the future 2 years, which renders some insiders to be pessimistic about market trend. One industrial senior reflects that if the new capacity in 2019-2020 starts operation as scheduled, downstream market may need at least 8 years to consume the excessive capacity.
Excessive capacity of one industry often leads to greatly shrinking profit, while PIY market can be highly variable.
|Startup time of the new capacity in the future 2 years|
|Company||Capacity (Unit: kt)||Startup time|
|Jiangsu Huaya||100||After Spring Festival of 2019|
|Taizhou Sanwei||200||Jun-Jul, 2019|
The startup time of the new units is disperse and has big uncertainty. Huaya’s new capacity released in this Oct, and the production has increased to 250mt/day, while new products focus on conventional coarse deniers like 3000D with big selling pressure. Cautious attitude is held toward the new capacity released after Spring Festival in 2019. Taizhou Sanwei’s new unit is scheduled to begin operation in Jun-Jul, 2019, and the on-spec goods are conservatively anticipated to appear in Aug, which may have limited influence on the actual production in 2019. Hengli and Billion’s new plants are rumored to be delayed. Hengli’s new plant has been delayed for many years. Billion plans to add new textile filament and PIY capacity at the same time in the future two years, so the startup of new PIY capacity is not ruled out being prolonged.
2. Survival of the fittest on PIY market
The production chain of most PIY plants is relatively short, mainly simply focusing on PIY without complete supporting unit of the industrial chain, especially upstream equipment. PIY plants are not equipped with PTA unit except for Hengli. Most PIY plants are medium-to-small sized units, even not having PET fiber chip equipment. Once profit of PIY declines substantially, some PIY plants may be eliminated.
3. Strongly controlled run rate; stably growing demand
Relatively speaking, PIY plants have stronger capability to regulate operating rate and control production than textile filament plants. No big new capacity is scheduled to start operation overseas in recent years and some old units are expected to be obsoleted, so overseas demand for PIY may grow stably.