July-August is supposed to be a relatively slow season for the textile market, but this year the situation is obviously “different”! The cash flow profits of FDY and POY both exploded in early July, and the price of FDY conventional 150D was as high as 1,000 yuan/ton.
However, not all products are so “successful”! DTY products, which have had stable and good profits in recent years, have become “losers” in this year’s hot market. As can be seen from the figure below, the cash flow of DTY150D from July to August was basically below 300 yuan/ton, which is far behind POY and FDY.
Why did DTY, which has performed well in recent years, become a “failure”?
Since the beginning of this year, POY has performed strongly. The “POY Industry Conference” held every now and then has made POY pricing power with highly concentrated production capacity even stronger. In addition, the supply and demand relationship between POY and DTY has also been to a certain extent since this year. It affects the profit distribution pattern.
First of all, the editor mentioned at the beginning of this year that the increase in texturing machines nationwide this year is expected to reach about 900 units, corresponding to an increase in POY demand of about 1.18 million tons/year. Judging from the actual increase, , the actual increase this year is far more than 900 units, and some people in the industry even said: the increase in polyester texturing machines is expected to double in 2017!
At the same time, looking back at the new production capacity of POY, as of the end of August, the actual new production capacity was Hengbang Phase II CP1 and CP2 with a total production capacity of about 500,000 tons (of which CP2 was only put into production in mid-August), and the resumption of production The 160,000-ton production capacity of the first phase of Yijing (it was overhauled for some reason shortly after restarting). Therefore, the actual increase in POY in the first half of this year is quite limited.
At the same time, the demand for DTY in the downstream weaving end is not optimistic. Market participants reported that the Xiaoshao circular knitting machine market continued to be sluggish in the first half of this year, and the demand for DTY was obviously insufficient; at the same time, part of the DTY demand in Haining warp knitting and other markets was replaced by FDY. It will also have a certain impact on the demand for DTY.
As demand gradually releases, can DTY make a comeback?
Entering September, the market situation has changed again. First of all, POY will usher in the peak period of production/resumption of production in the later period.
Judging from current market expectations, the devices that will be put into operation in September include Yifeng (formerly Minghui) and Yijing Phase II (formerly Hongjian Phase II), with a total POY production capacity of approximately 500,000 tons; in addition, the maintenance devices that will be restarted include Yijing The first phase has 160,000 tons of POY and the Yifeng second plant has 100,000 tons of POY. In summary, about 760,000 tons of production capacity will return to the market in September.
In addition, downstream demand has begun to gradually recover!
On the one hand, the Xiaoshao circular knitting machine market has recovered recently, and the product inventory of mainstream DTY factories has slightly dropped to about 15-20 days; secondly, the warp knitting market has significantly increased demand for fine-denier and porous DTY products. Market participants said: “Nearly 100,000 boxes The inventory has been cleared in half a month, and many specifications are in short supply.”
To sum up, it is obviously unrealistic for the cash flow of conventional 150D products to be at a low level of less than 300 yuan/ton for a long time. POY will usher in a period of intensive production/resumption of production in September. At that time, the market supply and demand situation will undergo certain changes, and product profits may be reallocated. . At the same time, as the Golden Nine and Silver Ten approaches, the market demand for circular knitting machines and warp knitting is gradually released, which may support the accelerated rebound of DTY.
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