Downstream demand recovery, chemical fiber industry ushered in a cycle reversal

Polyester filament stock "tired - decrease - increase - decrease", replenishment cycle continues. In the first quarter of 2020, affected by the epidemic, the textile and clothing industry has a demand crisis, retail sales have fallen off a cliff, the terminal supply and demand imbalance is transmitted along the polyester industry chain to the polyester filament industry, and the polyester POY inventory reached 35 days in March 2020, an increase of 289%. In the second quarter, domestic demand for textile clothing gradually rebounded, foreign demand for epidemic prevention materials soared, and superimpose polyester filament enterprises took the initiative to clear inventory through promotional means. Downstream textile and clothing enterprises concentrated inventory, polyester filament inventory pressure has been eased, polyester POY inventory in April fell sharply to 7.5 days, down 31% from the previous month. During the same period, polyester filament enterprises entered the replenishment cycle, but the downstream loom resumed work relatively slowly, resulting in a gradual increase in polyester filament inventory from June to October. Since the fourth quarter, with the foreign epidemic has been further controlled, the global textile and clothing enterprises have taken the initiative to replenish the inventory, and the export volume of polyester filament in our country increased to 260,000 tons in December, and the polyester POY inventory fell to 16 days, a decrease of 40% from the previous quarter. As of April 2, 2021, the polyester POY inventory days are 16 days, the current polyester filament inventory is still at a historical low, and the future will continue to replenish the inventory cycle.

Downstream demand to improve the profitability of polyester significantly, polyester filament spread change trend to "gold nine silver ten" as the bottom rebound turning point. In the first half of 2020, the polyester filament price spread was generally affected by the lower demand for downstream spinning and clothing and the accumulation of stocks. From the second quarter, the demand for overseas epidemic prevention materials began to rise, leading to the increase of polyester filament exports and the decline in inventory, and the filament price spread ushered in a small rebound in the downward trend. In the second half of 2020, global textile and clothing enterprises have successively entered the replenishment cycle, polyester filament demand ushered in a new round of warming, polyester POY price differential continued to fall to 614 yuan/ton at the end of August, ushered in an upward cycle, as of April 2, 2021, Polyester POY spread continued to rise to 1706 yuan/ton. With the normalization of the global epidemic prevention and control in 2021, the demand of the textile and clothing industry is steadily increasing, and the current polyester filament inventory is at a low level, and enterprises continue to replenish the inventory cycle, it is predicted that the polyester filament price spread will continue to maintain an upward trend, profitability will continue to improve, and the industry prosperity will pick up.