Views:1 Author:Site Editor Publish Time: 2019-03-29 Origin:Site
Price of cost side and product side divided
In early-Mar, price of polyester feedstock climbed up driven by commodity market, but polyester plants slashed price to reduce inventory. Speculative procurement from PFY end-users improved amid rising feedstock, and PFY plants witnessed eased inventory burden after sales improved.
From mid-Mar, feedstock market headed south, but PFY plants showed strong intention to raise price after inventory burden mitigated. Some downstream plants restocked in advance impacted by moderate downstream orders, tolerable sales and the future adjustment of VAT from Apr 1. Thus, although feedstock price dipped, price of PFY and PET bottle chip increased and stocks moved up.
Profit adjustment of industrial chain
PX-Naphtha spread rapidly narrowed by $100/mt affected by the news that Hengli’s new PX units has started operation. PTA-PX spread enlarged. MEG inventory accumulated and cash flow remained meager. Generally, the cash flow of polyester feedstock market was slanting weak.
Price of PFY increased after stocks declined, and its cash flow grew the most apparently among the polyester products. Price of PET bottle chip, PSF and PET fiber chip was supported by demand, and the cash flow was basically in firm correction, profitable on the whole. Generally, the cash flow of polyester products was sound.
Feedstock market saw mounting stocks, and polyester market witnessed falling inventory
Affected by the turnaround for Spring Festival holiday, stocks of PTA and MEG accumulated apparently in Jan-Feb, and the accumulation eased after polymerization rate ramped up in Mar, but the overall polyester feedstock market witnessed high stocks after the first quarter.
Stocks of polyester products accumulated in Jan-Feb during the Spring Festival holiday but declined after Mar. Inventory of some descriptions was slanting low or within normal level.
In Apr, downstream twisting units and fabric mills is likely to witness mixed orders, but the inventory of finished goods is low and feedstock stocks are high. The high run rate is supposed to maintain in Apr, showing moderate rigid demand for PFY. Sales of polyester spun yarn are slow, while the inventory of finished goods is not high, which may support the run rate of PSF industry. As for the PET bottle chip market, demand from beverage factories is anticipated to be sound in the second quarter. Generally, the support for polyester demand is expected to be moderate in Apr. Some units like Lixin, Tiansheng, Hengli and Chengxing restarted operation in end-Mar, and some new capacity from Lixin, Hailide, Lvyu, Jingwei and Xiangyang was released in Mar, which is expected to push up the monthly O/R and production in Apr. Some PTA and MEG units will have turnaround in Apr, which will improve the supply/demand relationship, but the long-term inventory burden should not be neglected, especially MEG market. In view of upstream market, the depression from cost side for the PX new unit is the major bear throughout the industrial chain. Therefore, polyester market is still expected to present mixed appearances in Apr: weak upstream but strong downstream market, and the mounting finished goods inventory burden in some fabric manufacturing bases should be alerted.