Since late May, the price of polyester filament yarn has continued to rise, with an increase of 8%/5%/5% for POY/FDY/DTY respectively, and the price difference has been quickly repaired. Domestic textile and apparel has entered the replenishment cycle, which is an important factor supporting the high growth of polyester filament yarn/weaving.
It is learned from the Zhitong Finance app that Tianfeng Securities has released a research report stating that since late May, the price of polyester filament yarn has continued to rise, with an increase of 8%/5%/5% for POY/FDY/DTY respectively, and the price difference has been quickly repaired. According to the simulated calculation, as of June 14th, the comprehensive profit of filament yarn was about 272 yuan/ton. Domestic textile and apparel has entered the replenishment cycle, which is an important factor supporting the high growth of polyester filament yarn/weaving. Currently, the absolute value of textile and apparel inventory is not high, and it is still expected to continue the replenishment trend from a seasonal perspective. The inventory of textile and apparel in the United States continues to decrease, and the inventory-to-sales ratio has approached a normal level. The replenishment of overseas textile and apparel is expected to further boost demand elasticity. Recommended focus: Tongkun Group (601233.SH), Xinfengming Group(603225.SH).
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Capacity expansion has slowed down and supply disruptions are frequent. From March to now, the average load of filament yarn has reached 92%, and as of early June, the load of filament yarn is still around 90%. According to international practice standards, filament yarn has become an industry with insufficient capacity. Recent supply side disruptions, such as the transformation of 1.6 million tons of boiler equipment, corporate collaborative production cuts, and peak summer electricity consumption or power restrictions, have all caused certain constraints on supply.
Tianfeng Securities believes that the trend of supply being less than demand is expected to continue in the future: The average apparent consumption increase of polyester filament yarn in the past 6 years was 2.8 million tons per year, and the average for the past three years was 2.92 million tons per year. From the capacity side, the new capacity in the industry in 2024 is 1.41 million tons. Taking into account the relocation or exit of some enterprises, the net increase in actual capacity growth rate may be significantly lower than this value; It is around 2.6 million tons in 2025, and the supply and demand of polyester filament yarn is expected to remain tight.
Strong demand and textile and apparel replenishment are important driving forces. From January to May 2024, the production of polyester filament yarn reached 17.89 million tons, a year-on-year increase of 24.7%. Excluding accumulated inventory factors, we estimate that there is still about 17% growth rate. From March to May, downstream rebound, and weaving load averaged 92.4%/69.9%, a year-on-year increase of 13.8pct/+11.3pct compared with 2023.
From January to May 2024, the production volume of polyester filament reached 17.89 million tons, a year-on-year increase of 24.7%. Excluding cumulative inventory factors, we estimate that there is still about 17% growth rate. From March to May, the downstream elastic yarn and weaving loads were averaged at 92.4%/69.9%, with a load increase of +13.8pct/+11.3pct compared to 2023.
Domestic textile and apparel has entered the replenishment cycle, which is an important factor supporting the high growth of polyester filament yarn/weaving. Currently, the absolute value of textile and apparel inventory is not high, and it is still expected to continue the replenishment trend from a seasonal perspective. The inventory of textile and apparel in the United States continues to decrease, and the inventory-to-sales ratio has approached a normal level. The replenishment of overseas textile and apparel is expected to further boost demand elasticity.
The demand for aromatics adjustment oil is weakening, and the pressure on the PX raw material side may ease year-on-year. In the past two years, the shortage of aromatic components with high octane values in the United States has caused a significant increase in the trade of para-xylene and ortho-xylene. However, currently, on the one hand, there will be significant increases in the supply of finished products with more new overseas refineries put into operation in 2024, which will alleviate the supply of finished products; on the other hand, in order to avoid a shortage of aromatics, traders are conducting advance export operations, and subsequent aromatic exports may shrink.
The second quarter is the peak period for domestic refineries' maintenance. PX load has experienced a significant decline, but its price difference is still lower than that of the same period in 2022/2023. With the end of the peak period of refinery maintenance, the supply of PX is expected to return, and the pressure brought to polyester filament yarn by raw materials may ease year-on-year in 2024.
Risk warning: The risk of demand is less than expected; the risk of intensified industry competition; the risk of significant fluctuations in raw material prices; the risk of changes in the macroeconomic environment.
Risk warning: risks of demand falling short of expectations; risks of increased industry competition; risks of significant fluctuations in raw material prices; risks of changes in macro environment.