China Chemical Fibers Association
Basic operation of the industry
1. Supply and demand
According to the National Bureau of Statistics, the output of chemical fiber from January to June was 24.6113 million tons, an increase of 8.4% YoY. The average operating rate of polyester and nylon industry is higher than 80% in the first half year. The viscose staple industry is affected by supply and demand, and the overall operating rate of the industry fluctuates between 80%~85%.
In terms of demand, besides cord fabrics, the output of downstream main products increased to varying degrees year-on-year; the operating rate of downstream factories also increased significantly; in addition, the total volume of light textile city transactions increased by about 33% year-on-year, especially in April and May, showing a strong demand for chemical fibers. Because of good production and marketing, the inventory of polyester and nylon industry is lower than that in the same period of last year, maintaining a low inventory status.
2. Market
Due to the rise in commodity prices, the price of synthetic fiber products in cost-driven is overall higher than that in the same period of last year, in which polyester filament rose by a larger margin. The market differentiation of each sub-industry is obvious, showing a double-day situation, the performance in polyester and nylon industry is good, while the operation in viscose fiber, acrylic and spandex industry is more difficult.
3. Quality and benefit
In the first half of this year, the growth rate of the main business revenue and profit in chemical fiber industry gradually increased YoY. Statistics from the National Bureau of Statistics show that from January to June, the main business income in the chemical fiber industry was RMB387.3 billion, with an increase of 16.27% YoY; the total profit was RMB17.8 billion, with an increase of 19.27% YoY. The industry had the loss of 21.92%, with an increase of 4.66 percentage points YoY, and the loss of loss-making enterprises increased by 22.21%. The total profit of industry and the deficit of loss making enterprises are both increasing, which shows that the profitability of enterprises is more differentiated.
According to statistics, the profit of chemical fiber industry mainly comes from polyester, cellulose fiber and nylon industry, but the viscose fiber industry in cellulose fiber industry is almost in a loss state.
The operation quality of chemical fiber industry is generally good. From January to June, the profit margin of the main business was 4.6%, with an increase of 0.12 percentage points YoY. The turnover of assets was accelerated. The increase in industry profits is mainly attributed to the rise in product prices and the follow-up of downstream demand. In addition, the development of new products is accelerating, in terms of brand, quality and variety having been improved.
Main factors affecting the operation of chemical fiber industry
1. International oil prices
In the first half of this year, the international oil price concussion went up and reached a new high, which provide chemical fiber prices with a strong support on the one hand, and was conducive to inventory surpluses, but on the other hand, it also pushed up production costs.
2. Capacity
Driven by good returns, enthusiasm for investment in the industry has not diminished. In the first half of the year, the growth rate of fixed assets investment in the chemical fiber industry continued the rebound trend of last year, increasing by 28.2% YoY, and the growth rate increased by 7.9 percentage points compared with the same period of last year. New capacity was released, backward production capacity exited, with a industry was in the shuffle period. Among them: the new production capacity of polyester industry was mainly led by large enterprises, and the degree of concentration was further improved; polyester staple fiber was profited from the market given up by recycled fibers; the speed of nylon drawing expanding capacity was not as fast as that of raw materials supply, nylon industry operation improved; the new production capacity of viscose staple fiber and polyurethane industry had a greater impact on and the market, the operation of the industry was difficult.
3. RMB depreciation
Although depreciation of RMB is conducive to exports, the proportion of chemical fiber exports is still low. And chemical fiber industry has a high degree of dependence on imports of raw materials. The depreciation of RMB will increase the cost of raw material import.
Industry operation forecast in the second half year
1. Demand
Demand may be weakening as the industry enters its traditional slack season from July to August, but downstream capacity has increased. The traditional peak season from September to October is still expected. On the export side, the growing protectionism is becoming even more violent, and this coupled with the escalation of Sino-US trade frictions, may lead to the transfer of foreign demand market or demand decline.
2. Crude oil
Only from the supply and demand side, OPEC countries will increase production, U. S. crude oil production will continue to grow, the supply and demand pattern of crude oil in the second half of the year may be slightly excessive. Oil price uncertainty increased.
3. Operation forecast of chemical fiber industry
The new production capacity is further released, and some long-term shutdown devices will be reopened, which will expand the supply side again. Demand growth is less than supply growth, which coupled with export instability may break the tight supply-demand balance of the industry (polyester polyester). The depreciation of the RMB will lead to the rising cost of imported raw materials, the quality and profit of the industry operation in the second half of the year are expected to be less than that in the first half.
