Polyester Price in June Forecast

    It is June now. How will poly series products price change in June? It becomes the focus of people’s attention. In my opinion, poly price trend is not optimistic. Let’s see from the following aspects:

   See from the overall industry chain, from the upstream PX, PTA, MEG to poly fiber series products, all of these have stock pressure. Such on PX, most PX production plants in China are running in full capacity. Korean S-Oil Company, its new aromatics plant has opened on 8th April. The system includes 900 thousand ton per year PX production capacity and 280 thousand ton per year Benzene Production capacity. Urumqi Petrochemical PX equipment started production on 10th April. Now the equipment load is around 60%. Korean GS Caltex planned to stop its aromatic equipment in June, but see from the latest news, whether the equipment will stop or not, it is still unsettled. As for PTA production, now it is experiencing over supply worry. According to data, after July, the new established 1200 thousand ton production in San Fangxiang began. After August, the 1500 thousand ton in Yisheng Ningbo began, and Yisheng Dalian will expand production 500 thousand tons in the second half of the year. In the second half of 2011, the total new added production is 3700 thousand ton, of which, 3200 thousand ton has put into operation in February and March. The new added production will increase the supply, which as a result, will inhibit PTA price. While MEG port stock is reduced in the latest month, but according to data, there is still 500 to 550 thousand ton stock. Poly filament stock is reduced, but the stock pressure still exists. Most poly fiber spinning plants’ stock lowered to 15 days’ amount and few plants’ stock amount still as high as 20 days’ amount.

   With the temperature goes up, the major chemical fiber weaving base in China is going into load shedding peak. On 17th May, the original shunt avoid peak D grade 2400 thousand KWA changed to the new shunt avoid peak C grade 3000 thousand KW. According to Jiangsu Power company, the power shortage this summer is estimated above 11000 thousand KW, about 16%. See from the situation of last year, load shedding activity will cause some influence on chip spinning equipment and elasticizer operation rate, but bring little influence on poly industry chain. It will bring a big shock to the downstream operation rate of warp knitted plants, water jet plants and air jet plants. Thus the policy of “five days’ work and two days’ stop” or “four days’ work and three days’ stop” have been carried out in Wujiang, Changshu, Changxing and some other areas.

    To sum up, the whole poly industry chain is still in stock pressure. Material demand will shrank under the influence of load shedding program. Circulate in this way, poly fiber material stock will be further enlarged and the negative influence will also be enlarged.

    11th May, the National Statistics Bureau released the data of macro economic performance. The market focus is still the price index and potential inflation pressure. Consumer prices rose 5.3% in April in compare with the same time of last year, industry products EXW price increased 6.8%. New loan amount 739.6 billion CNY, reduced 20.8 billion. By the end of April, M2 balance 757.3 trillion, which increased 15.3%, and decreased 1.3% in compare with last month and 6.2%, in compare with the same time of last year. M1 balance 266.8 trillion, which increased 12.9%, and decreased 12.9% in compare with last month, and 18.4%, in compare with that of last year. The new added industry value increased 13.4% in compare with that of last year, and 0.93% in chain relative.

    See from the macro economic performance of the upstream and middle reaches of the field, power and raw material price surge seems to be inhibited, but continue to run in high price. The influence factor of inflation has stepped aside. China’s inflation is more influenced by the transmission endogenous factors. The CPI data in the non-food part of the consumer price index further mounted high, which make the inflation standstill in high price. Experts believe the price increase trend of the three indicated CPI price pressure will exist for long term. But endogenous factor will not weaken.

    Recently, the rumor of textile export tax rebate is widely spread. See from the current economic structure, tax rebate ratio lowering down belongs to a kind of reasonable economic control measure. Only if the lowering degree is reasonable, it will not bring big shock to the industry. After all, tax rebate rate before the economic crisis has been below the present level. After the economic crisis, in order to stabilize the economy, the government increased the tax rebate rate to the present level. Even to say the least, if China’s textile industry really masters the right to speak, by the protection of national policy is completely unworkable. So although the reduction of tax rebate rate will bring some impact to the industry, it will certainly play more positive role in the long run.