The inflection point of prosperity is approaching, and polyester filament should be configured

In 2019, China exported 2.68 million tons of polyester filament, accounting for 7% of the total domestic polyester filament production. In April and May this year, the export volume fell sharply year-on-year, and then with the overall domestic exports returned to normal, as of the end of November, a total of 2.406 million tons of polyester filament were exported in November this year, a decrease of 32,000 tons from the same period last year. Filament direct export has not directly benefited, this is because filament as a raw material for textile and clothing, China's main export destination for Turkey, Brazil, Egypt and other industrial countries that need to be processed again. In terms of manufactured goods, China's textile exports to the United States in the first 11 months were 47 billion US dollars, an increase of 19%, excluding Q1 China's abnormal epidemic impact, April-November exports to the United States textile growth rate of 33%; China's textile exports to the EU in the first 11 months of 47.4 billion US dollars, an increase of 14%, April to November exports to the EU textile growth rate of 26%, the growth rate is slightly worse than the United States. China's chemical fiber industry chain ultimately benefits from downstream terminal products.

In the short term, it is difficult for the new coronavirus vaccine to fully cover the entire population in the short term, and it is difficult for the overseas supply side to return to normal in the short term due to the impact of the epidemic. On the basis of large subsidies to the cash flow of the European and American governments, China's textile and garment industry chain will also fully benefit from the recovery of global demand. In the medium and long term, the epidemic will eventually improve, and the marginal upward demand for textile clothing is expected to usher in an inflection point in the industry.

From the existing production capacity, China's polyester production capacity in 2020 is 67.13 million tons, and it is expected to increase by 616 and 6.45 million tons in 2020 and 2021, respectively, with a year-on-year increase of 10% and 9.6%. Corresponding to the company, Hengyi Petrochemical, Tongkun shares and new Fengming added 195, 500 and 600,000 tons of polyester production capacity in 2020, as of now, the three companies have 980, 740 and 5 million tons of polyester production capacity, ranking among the top three in China.

From the perspective of polyester filament end, the industry leader is the main force of new production capacity in the next few years. Hengyi Petrochemical, Tongkun shares and new Fengming this year, respectively, the new investment of 100, 500,000 and 600,000 capacity, accounting for 67% of the country's new production capacity, the industry capacity growth rate of about 7.9%; In 2021, the three are expected to put into production 2.5 million tons of filament production capacity, accounting for 66% of the country's new production capacity, and the industry capacity growth rate is expected to be 8.9%.

2015-2019 polyester filament demand compound growth rate of 6%, 2020 January-November apparent demand growth rate fell to 3%, looking forward to 2021, demand growth is expected to fall between 4%-9%, considering the economic repair driven demand recovery and low base reasons, the growth rate is expected to be close to 9%, It is expected that the supply and demand relationship of filament will tend to improve next year.

From the perspective of the industrial chain itself, polyester filament upstream raw materials PX, PTA and ethylene glycol in the next two years, the new production capacity growth rate of more than 20%, more than polyester growth rate of 10 percentage points, the entire chemical fiber plate profit is conducive to the transfer of polyester end. From the perspective of the whole chemical fiber industry chain, with the continuous improvement of PX self-sufficiency rate of upstream raw materials, China's chemical fiber industry will realize the complete localization process of PX-PTA/ ethylene glycol - polyester filament filament - textile and clothing terminal products. Industry leaders can rely on integration and scale advantages into a global competitive advantage, China's chemical fiber industry is expected to dominate the global textile and garment raw materials market.