Operation of China's Chemical Fiber Industry From January to September 2021

Since the beginning of this year, the domestic and international challenges faced by the industry are complex, especially in the second half of the year, the domestic epidemic fluctuates and the dual control of energy consumption continues to increase, which has a significant impact on the recovery of the industry's main operating indicators. The stable domestic demand market and the increase in international demand are still good for the economic operation of the industry. The continuous rise in international oil prices has provided strong support for the chemical fiber market, but at the same time it has also increased the production costs of enterprises. Looking forward to the whole year, the operation of the chemical fiber industry will still face many challenges, but the industry has good development resilience and risk resistance, and will continue to achieve stable development.

　　#01 Production growth slowed down

In the first three quarters, the overall start-up load of the chemical fiber industry remained high, but in September, due to the impact of dual-control power consumption and curtailment, the start-up load dropped rapidly. Taking direct-spun polyester filament as an example, the operating load at the beginning of September was about 85%, and it fell to about 75% at the end of September. Although it rebounded slightly in October, the overall operating load was still low, with an average monthly operating load of about 77%, a new low in the year. . According to data from the National Bureau of Statistics, from January to September, chemical fiber output was 50.37 million tons, an increase of 13.54% year-on-year. Taking January-September 2019 as the base period, the average growth rate of chemical fiber output in two years was 6.75%.

On a monthly basis, affected by the change in the base of chemical fiber production last year, the year-on-year growth rate of chemical fiber production this year has declined month by month (Figure 2). Coupled with the impact of dual-control energy consumption and power curtailment, the single-month chemical fiber production in September decreased by 2.0% year-on-year, 1~ The growth rate of chemical fiber production fell to 13.5% in September, 3.6 percentage points lower than the growth rate in the first half of the year. Judging from the two-year average growth rate, the average growth rate in the first three quarters remained stable and slowed down.

　#02 The price center moves up

From a cost perspective, international oil prices continue to rise. The prices of WTI and Brent crude oil have risen from US$48/barrel and US$51/barrel at the beginning of the year to US$75/barrel and US$78/barrel at the end of September, both rising by more than 50%. . In October, WTI and Brent crude oil prices both exceeded the $80 mark, and international oil prices have far exceeded the price level before the outbreak.

Affected by the increase in crude oil prices, the cost of chemical fiber has been rising accordingly, driving up the price of chemical fiber in the market, but the increase is not as good as that of raw materials. Taking polyester as an example, at the end of September compared with the beginning of the year, raw materials PTA and MEG increased by 36% and 43%, respectively, and polyester filament (POY) and polyester staple fiber increased by 30% and 24%, respectively. It can be seen that the price increase of fiber products is lower than the increase of raw materials.

　　#03Exports keep growing

According to statistics from China Customs, from January to September, the export of major chemical fiber varieties was 3.5484 million tons, an increase of 21.49% year-on-year, and the growth rate dropped sharply by 21.03 percentage points from the first half of the year. The quarterly production supply has decreased. On the whole, chemical fiber exports still maintain a growth trend. Although the growth rate has dropped from the previous month, the export scale still exceeds the level before the epidemic, with a two-year average growth rate of 3.31%.

　#04 The terminal market remains well

Since the beginning of this year, the domestic textile and apparel market in my country has withstood the local epidemic and flood, and the recovery has been consolidated. According to the National Bureau of Statistics, from January to September, the total retail sales of clothing, footwear, and knitting textiles above designated size increased by 20.6% year-on-year, and the growth rate rebounded by 33 percentage points from the same period last year, with an average growth rate of 2.8% over the two years. Online consumption continues to play a role in stimulating the domestic demand market. From January to September, the national retail sales of online clothing products increased by 15.6% year-on-year, and the growth rate increased by 12.3 percentage points from the same period last year, with an average growth rate of 9.3% over the two years.

In terms of exports, my country's textile and apparel exports have maintained good growth due to the rebound in demand in the international market and the return of some overseas orders. According to data from China Customs Express, from January to September, my country’s textile and apparel exports totaled 227.59 billion US dollars, an increase of 5.6% year-on-year, and the growth rate slowed by 6.5 percentage points from the first half of the year, with an average growth rate of 6.2% over the two years. The clothing export situation has improved significantly. From January to September, clothing exports reached 122.41 billion U.S. dollars, a year-on-year increase of 25.3%, the highest growth rate in the same period since 2010, with an average growth rate of 4.2% in two years. Affected by the decline in the demand for international epidemic prevention materials, from January to September, textile exports were US$105.18 billion, a year-on-year decrease of 10.7%, but the two-year average growth rate still reached 8.6%.

　　#05 Profitability continues to be stable

From the data of the National Bureau of Statistics, the overall economic benefits of the chemical fiber industry have increased significantly compared with the same period in 2020. From January to September, the chemical fiber industry achieved operating income of 744.183 billion yuan, an increase of 33.28% year-on-year, with a two-year average growth rate of 7.85%; total profit was 47.138 billion yuan, an increase of 317.99% year-on-year, and a two-year average growth rate of 52.70%; operating income profit margin Reached 6.33%, an increase of 4.31 percentage points year-on-year, an increase of 3.17 percentage points from the same period in 2019; the industry's loss was 20.56%, which was 18.36 percentage points less than the same period last year, and 3.86 percentage points less than the same period in 2019; loss-making enterprises lost 3.952 billion yuan , A year-on-year decrease of 54.17%, and a two-year average decrease of 12.89%.

The profitability of the chemical fiber industry ranks first in the entire textile industry chain, of which the polyester and spandex industries contribute 40% and 23% of the total profit respectively. The supply-side structural reform is the fundamental reason for the substantial increase in the efficiency of the chemical fiber industry. The industry's supply and demand pattern has improved, and the profits of the industrial chain have shifted from the raw material link to the fiber. In addition, the inventory premium of raw materials and products in the price increase channel also contributes a larger profit to the enterprise.

　　#06 The growth rate of fixed asset investment is obvious

According to data from the National Bureau of Statistics, from January to September, the chemical fiber industry actually completed investment in fixed assets increased by 29.5% year-on-year, and the growth rate rebounded by 51.8 percentage points from the same period last year. The average growth rate of investment in the chemical fiber industry in two years was 0.3%. Basically restored to the level before the epidemic.

　　Outlook

Looking forward to the whole year, the operation of the chemical fiber industry will still face many challenges. In the context of the global economic recovery, and with the colder weather, demand for crude oil consumption is expected to remain strong. On the supply side, OPEC remains cautious in increasing production. However, negotiations on the Iranian nuclear agreement and changes in currency policies of various countries may become risk points leading to fluctuations in oil prices. Oil prices are expected in the fourth quarter. The support for the chemical fiber market weakened. In October, power rationing in various regions has been liberalized, the operating rate of downstream weaving has recovered significantly, and the load of the chemical fiber industry has recovered slowly. Recently, Fujian, Zhejiang and other places have suspended orderly power consumption measures, which means that the power curtailment policy will be further liberalized in the short term. At the same time, the holiday atmosphere at the end of the year will increase terminal market demand, but the release of new capacity will be a hedge to a certain extent. In addition, we still need to pay attention to the uncertainty caused by the rebound of the winter epidemic on the industry.

In general, in the fourth quarter, with the consumption of raw materials stocked by downstream enterprises and stable demand, the start-up load of the chemical fiber industry will further increase, but it is difficult to rise to the previous high, and the chemical fiber market price will remain high and fluctuate. It is expected that chemical fiber output will be affected by the gradual increase in the base during the same period last year, and the annual growth rate will further decline compared with the previous three quarters; the economic efficiency indicators will still be significantly better than last year. However, the industry must have a clear understanding and be wary of the decline in international oil prices and the apparent relief of the new crown epidemic. The "reverse flow" of overseas orders will bring greater risks to my country's chemical fiber textile industry. The stricter dual control of energy consumption in my country will also be the industry. Problems to be faced for a long time.