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

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The production cycle of the chemical fiber industry is coming to an end, and the new production capacity has entered the market digestion stage. Compared with other chemical products, the chemical fiber industry shows the characteristics of early investment start and early investment end, and the investment cycle corresponds to the order of the business cycle start. From the historical data, the investment situation of the chemical industry and the investment cycle of the chemical fiber industry have obvious correlation. From 2006 to 2019, the chemical fiber industry and the chemical industry have experienced four investment growth periods, with a 4-25 month interval at the beginning of the cycle. In 2019, the new production capacity of chemical fiber varieties has come to an end, and the chemical fiber industry has bottomed out from the perspective of supply. In terms of chemical fiber production capacity, the cumulative fixed asset investment in the domestic chemical fiber industry showed an increasing trend from 2016 to 2018, but the new chemical fiber production capacity is still at a historically low level. In 2020, due to the impact of the production cycle of the chemical fiber industry and the new coronavirus epidemic, the total output of domestic chemical fiber is 61.68 million tons, an increase of only 3.6%. In the next few years, the production of domestic chemical fiber industry continues to slow down, and it is expected that the new supply of the industry is limited.

The change of chemical fiber inventory has a certain lag compared with the trend of CCPI, and it is expected that chemical fiber will usher in a replenishment cycle. Taking 2017-2018 as an example, the 2017Q2-2018Q3CCPI was in the rising cycle, and the chemical fiber inventory increased in 2017Q3-2018Q4, and the trend of chemical fiber inventory had a certain lag synchronization compared with the trend of CCPI, so the chemical fiber inventory as a lagging indicator had a certain predictability. Chemical fiber inventories fell significantly year-on-year from an all-time high of 40.7% in October 2018 to an all-time low of -10.5% in October 2019. Affected by the epidemic in early 2020, downstream demand was hit hard, and chemical fiber inventories increased significantly year-on-year, rising to 23.8% in March 2020. Since the second quarter, domestic chemical fiber production and sales have returned to normal, with the continuous recovery of overseas demand and the increase of export demand, and the inventory has entered the continuous decline channel after experiencing a brief rise in the second quarter. CCPI continues to rise after bottoming out in Q2 in 20 years, and the chemical fiber industry is expected to usher in a replenishment cycle.

The epidemic situation has become normal, and the prosperity of the chemical fiber industry has rebounded. At the end of 2019, the new production capacity of chemical fiber was basically completed, and the stock of chemical fiber was high due to the impact of the epidemic. The average inventory of chemical fiber in 2019-2020 has reached a historical high, and the industry's prosperity is depressed. At the beginning of 2020, due to the impact of the new coronavirus epidemic, domestic population migration was blocked, the operating rate of chemical fiber enterprises fell sharply, and the inventory of finished products was once high. 2020Q2 The domestic epidemic gradually stabilized, overseas textile and garment knitting demand picked up, textile and garment orders returned to domestic enterprises, chemical fiber enterprises significantly destocking, chemical fiber inventory at the end of 2020 has been at a low level, with downstream demand picking up, industry replenishment demand is strong.

1.2, downstream demand recovery, chemical fiber industry recovery

The export of downstream textile products increased significantly, which led to the recovery of the chemical fiber industry. In March 2020, the delivery value of chemical fiber outbound was 5.28 billion yuan, down 0.7% year-on-year. Since March 2020, the overseas epidemic has intensified, a large number of textile and knitting orders have been transferred to the domestic market, the downstream textile and clothing exports of the industry have increased significantly, and the delivery value of chemical fiber exports has continued to rebound since the second quarter of 20 years.

In the second quarter, the operating rate of domestic chemical fiber enterprises increased rapidly. Affected by the epidemic in the beginning of 20 years, domestic enterprises are generally in a state of shutdown and production, the capacity utilization rate of chemical fiber manufacturing industry hit a new low of nearly 5 years in March, and the inventory of finished products in the chemical fiber industry was high. Since the second quarter of 2020, domestic enterprises have generally resumed production, with the recovery of overseas demand, good orders, and the operating rate of the chemical fiber industry has climbed rapidly.The export demand for textile products has increased significantly, becoming the main force for the recovery of the chemical fiber industry. The epidemic abroad has led to the transfer of a large number of textile and garment processing orders to China, and the export of chemical fiber has declined year-on-year. Affected by the epidemic, the demand for foreign epidemic prevention materials has increased sharply, and the export amount of textile and clothing in 2020 has reached a historic high of $31.29 billion, and the demand for textile and clothing continues to increase during Thanksgiving and Christmas. Among them, the cumulative equivalent ratio of textile yarns, textiles and products exports increased from -19.9% in February to 33.7% in September, and began to decline slightly in October, but still maintained a high level.