The "pain period" of the PTA industry chain is far from over

The bankruptcy of the polyester industry is accelerating. In early May, Shaoxing Shenying Group declared bankruptcy due to its debt of nearly 2.8 billion yuan. It is understood that the group owns 9 core companies including Shenying Garment, Shenlong Garment, Shenma Garment, and Casual Wear. It is worth noting that this is only the tip of the iceberg. In an interview, a reporter from Futures Daily learned that, in addition to textile and garment companies, 16 chemical fiber companies have closed down in the past two years. "The news of bankruptcy often appears, but it is actually a microcosm of the weakness of the polyester industry." A person in the industry bluntly said. It is understood that after the financial crisis, thanks to the good production efficiency and sound monetary policy in the early period, the polyester industry entered a new round of production peaks after 2009, with an average annual increase of 3.5 million tons of new production capacity. With the intensification of excess capacity, corporate efficiency began to decline in 2012. At the same time, coupled with the tightening of liquidity, the shutdown and closure of chemical fiber companies began to highlight. Talking about the changes in the polyester industry, Wu Wenhai, a person in charge of Soochow's investment who has been engaged in PTA trade for many years, is deeply moved. "Since 2009, there have been two types of capacity expansion in the polyester industry." According to him, one is the expansion of established polyester companies. At present, 14 ultra-large polyester companies with a size of one million tons or more have been formed; the other is It is the expansion of new polyester enterprises. The scale of such enterprises is 200,000 to 250,000 tons. The enterprises have a thin foundation, high debt, and no original capital accumulation. Wu Wenhai believes that enterprises that have been put into operation since 2011 are basically losing money. They have the greatest operating pressure and are the first to be shuffled. Among the chemical fiber enterprises, due to cost competition leading to long-term losses, starting in 2012, some conventional chip spinning companies were forced to reduce production or even go out of business. "For chip spinning, this is an era of choice." Ni Guomiao, senior analyst of Polyester at Huarui Information, said that in the context of overcapacity, it was the conventional chip spinning company that was shuffled first. For direct spinning enterprises, the reduction of production or even the closure of the enterprise is not due to the disadvantage of cost competition, but the breakdown of funds. The reporter found that many closed spinning companies have a common feature in that they have expanded. Just in the past few years, the decline in benefits has been severe, and the liquidity has tightened, which has led to the collapse of these companies due to financial breakdown. "There is a phenomenon of mutual protection and joint guarantee in the polyester industry chain. The failure of a company may involve related companies. Therefore, banks are more cautious about lending to the polyester industry and even draw down loans. This will only make the polyester industry worse." Guo Miao said. From the reshuffle of the chip spinning industry in 2012 to the reshuffle of the direct spinning industry in 2014, in fact, the polyester industry has entered an accelerated reshuffle period. As of now, the actual output of nearly 10 million tons of chip spinning capacity is only 3 million tons. Since 2012, 12 direct spinning companies have gone bankrupt. Among them, in just two years from 2014 to 2015, nine direct spinning companies were affected.明显 The off-season market boom is clearly “yellow”. In fact, since 2013, the polyester industry has entered a long bear market, and the prosperity of the PTA downstream market has turned on “yellow”. In particular, due to the weak economy and sluggish exports in the past two years, orders have shrunk. Even in the peak season, it has not been popular in previous years. "The downstream demand is like Wang Xiaoer's New Year, and one year is not as good as one year." Wu Wenhai admitted frankly.他 In his opinion, the growth rate of China's textile and apparel export demand peaked in 2010, and the absolute value of export value peaked in 2014. The downturn in the terminal textile industry is directly transmitted to the polyester factories, and most manufacturers are plagued by large inventory and low production and sales rates. In this state, price cuts have become the norm. It is understood that, in addition to bottle chips and staple fiber, capital preservation or small profits, filament yarn products with the largest proportions are always in a loss state, and direct spinning filament companies with insufficient operating rates and tight funds are everywhere. "The long-term low profit or even loss has caused the company to face the problems of limited financing channels and high financing costs." Hongye Futures analyst Zhang Yongge said that the upstream and downstream resonances have reduced the profitability of the polyester industry. Support and pull up, but subject to the downturn of the terminal, the polyester industry has been going downhill. According to market participants, the vast majority of 200,000-ton polyester factories are facing pressure to survive. In May, the PTA downstream entered a traditional off-season. What worries the market is that this year's off-season seems to have come even worse. "The weakening of the PTA downstream is first reflected in the weaving link. The" Golden Three Silver Four "market ended one month in advance, which caused the rigid demand for upstream polyester to significantly weaken." According to Soochow Futures analyst Wang Guangqian, Hangzhou and Wujiang areas The production capacity of printing and dyeing companies has been compressed, which has resulted in a backlog of fabric products in the weaving process. The operating rate of Jiangsu and Zhejiang loom peaked in mid-March and fell. With the decline in the operating rate of Jiangsu and Zhejiang loom, the light effect of the market is transmitted to the upstream polyester polyester yarn. Although the current operating rate of polyester companies is still around 82%, Wang Guangqian believes that this only shows that some polyester companies have acceptable cash flow. Although the inventory is under pressure, it has not yet reached the critical point of tolerance and the terminal demand has not completely weakened In the current situation, in order to gain market share, polyester companies can only bravely produce, and the decline in the operating rate of polyester companies in the later period is a high probability event. Poor atmosphere at the bottom of PTA prices Since May, the commodity market has cooled, PTA futures have been under pressure and the focus has returned to fundamentals. In the early stage, crude oil was boosted by the expected drop in supply and prices rose. However, in the medium and long term, oil prices may touch resistance levels and there is a possibility of adjustment. "Prior to the rise in oil prices, PTA has not followed the rise, and under the circumstances of negative macro factors, PTA is very likely to resonate with crude oil, thereby strengthening its weak decline." An industry source said. In addition, fundamentals do not support rising PTA prices. Upstream PX may have a periodical surplus, while terminal demand has weakened significantly. From late April to May, the downstream weaving mill entered the off-season atmosphere early, orders fell, and manufacturers were pessimistic. The reporter learned that due to seasonal factors, the short-term PTA price trend depends on demand. According to previous years, light demand for PTA downstream will continue for at least one and a half to two months. "On the one hand, due to the seasonal decline in the operating rates of Jiangsu and Zhejiang loom in summer and the maintenance of equipment, the operating rate of polyester enterprises will passively decline; on the other hand, after the backlog of polyester finished products is backlogged, the capital flow will be tense and inventory pressure Next, price reductions and destocking are the general trend. Increased production losses and high inventory levels will also force polyester companies to reduce operating rates. "Wang Guang said before.他 In his opinion, after the seasonal downturn in downstream demand, the high load of PTA companies can not be maintained. If PTA companies actively follow polyester companies to reduce operating rates, it will put pressure on the upstream raw material PX end, and if PTA companies use high operating rates to compete for market share, they will bring inventory pressure to themselves. Until supply and demand are rebalanced, and certain futures stocks are digested, or a sharp upward rise in oil prices, PTA and its downstream industries will usher in a turnaround. At present, whether it is a primary chemical fiber company or a recycled chemical fiber company, due to serious product homogeneity, rising labor costs, shrinking demand for textiles and clothing, and rising environmental protection costs, some companies are not doing well and have to withdraw from the market. In addition, under the background of supply-side reform, banks have certain restrictions on lending to excess industries. After a long-term loss, PTA industry chain related companies with financial difficulties may not survive this "cold winter." According to Gao Shuai, an analyst at Zhuozhuang Information, in the "pain period" of the industry reshuffle, there are no disappearing industries, only disappearing companies, and well-run companies will become stronger and stronger in the process. “The" pain period "of the PTA industry chain is far from over, and related companies in the industry chain should make good plans to" tighten their belts and have a hard time ". (Futures Daily)