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In just three years, the profit of polyester staple fiber fell from the first place to the last place in polyester products, due to the aggravation of supply-demand imbalance caused by the continuous expansion of new production capacity and the high crude oil price driving up the polymerization cost. In the future, the planned production capacity may continue to be put into operation, and the oversupply of polyester staple fiber may continue to intensify; The high oil price may fluctuate or become normal, the high cost of polyester staple fiber is difficult to ease, and the profit performance may be difficult to be optimistic.

In 2020, the profit of polyester staple fiber industry will usher in a high light moment, with an average annual gross profit of 363.48 yuan / ton in 2020, ranking first among polyester products; In 2021, the average price gross profit was 130.27 yuan / ton, a year-on-year decrease of 64.16%; From the beginning of 2022 to June 14, 2022, the average gross profit of polyester staple fiber is -95.36 yuan / ton, which has fallen into a loss situation, and the profitability of polyester products has dropped to the bottom.

Reason 1: the contradiction between supply and demand of polyester staple fiber intensifies and the profit level drops
In 2020, the capacity base of the polyester staple fiber industry will be 8.405 million tons, with a capacity growth rate of 4.5%. The release of new capacity will increase the annual supply to 7.44 million tons, with a supply growth rate of 10.59%; At the same time, in terms of demand, some specifications of polyester staple fiber products are used as substitute raw materials for epidemic prevention materials. Combined with the return of foreign textile orders to China in October 2020, the dual factors have contributed to the rapid growth of polyester staple fiber demand to 7.29 million tons, with a demand growth rate of 13.60%. Therefore, the supply-demand relationship of polyester staple fiber in 2020 is relatively balanced and the profit is good.

Since 2021, the profitability of the polyester staple fiber industry has continued to decline, mainly due to the insufficient follow-up of demand and the deterioration of the supply-demand relationship under the growth of supply. In 2021, the total supply of polyester staple fiber will be 7.456 million tons, the supply growth rate will be 0.17%, the total demand will be 7.326 million tons, the demand growth rate will be 0.45%, and the contradiction between supply and demand will deepen.

Reason 2: the rising cost erodes the profit space of the industry
In 2021, the rise in the price of raw materials represented by crude oil started. By 2022, affected by emergencies, the price of crude oil continued to rise, driving the price of PTA and ethylene glycol, the double raw materials of polyester staple fiber, to rise violently. Under the rising cost of polymerization of polyester staple fiber, polyester staple fiber was constrained by the aggravation of the contradiction between supply and demand, and the price increase was far lower than the raw material increase, resulting in the continuous compression of the gross profit of polyester staple fiber to a loss.

Expectation 1: planned production capacity or gradually put in excess supply will continue to weaken the profitability of polyester staple fiber
According to the latest survey in June 2022, the planned new capacity of polyester staple fiber in 2022 is 1.6 million tons, of which 300000 tons of new capacity of a staple fiber factory in Huzhou is under test. It is expected that the discharge will be completed in June, and the remaining 1.3 million tons of planned capacity will be gradually completed in the second half of the year. If the new production can be put into operation gradually, the supply of polyester staple fiber will increase significantly, while the demand in various consumer areas is moderate, and there is no clear expectation of increase. The situation of excess supply of polyester staple fiber will continue to deepen, the bargaining power of buyers will increase, and the profitability of polyester staple fiber will continue to decline.

Expectation 2: the cost pressure continues to increase and the gross profit loss of polyester staple fiber is difficult to repair
In terms of crude oil, it is expected to continue to maintain a strong trend in wide range fluctuations. On the one hand, the supply side is unable to increase production in a large amount in the short term, while the high oil price does not restrain demand, and there is no accumulation tendency of crude oil inventory; On the other hand, in the process of continuous decline of US stocks, the monetary policy of the Federal Reserve, such as the previous interest rate increase and table contraction measures, will be moderately expected to relax in consideration of the downward pressure on the economy, which will greatly reduce the downward pressure on the capital market.

From the perspective of px-pta, the rise of PX prices in Asia in early June was mainly due to the resonance of cost and supply. The continuous rise of PX directly pushed up PTA prices. In the medium and long term, the domestic PX supply may be in short supply, and PTA may maintain a strong shock under the game between cost and supply and demand.

In general, there are two main reasons for the decline of polyester staple fiber gross profit from the first place to the last place in polyester products, one is excess supply and demand, the other is cost pressure; In the second half of the year, the contradiction between supply and demand of polyester staple fiber may intensify, and it is difficult to release the pressure on the cost side. It is expected that it will be difficult to repair the gross profit of polyester staple fiber, which will remain in the low range.