The production of recycled polyester has significantly reduced, and what will happen next year

It's been November, and after the market experience for most of the year, I have a profound experience of sourness, and many industrial chains say that there is no "gold nine silver ten", "cold nine ice ten" is almost the same. Now many products are in the stage of resistance, the regeneration performance is more obvious, this year's raw extrusion is serious, coupled with the sluggish export of domestic demand, roughly estimated, this year's recycled polyester short production significantly reduced by 11,52 tons, up to 10.3% (the statistics will continue to be updated at the end of the year)!

Fig. 1 Trend of short capacity and output of recycled polyester

It can be seen from the figure that after a downturn in 2014-2015, it bottomed out in the second half of 2016 and reached a climax across the board in 2017. 2017 is really the best year for recycling development in the past five years, during which the high-priced recycled hollow price exceeds the low-priced original price, but the solid waste ban breaks the balance of raw materials, and the advantages of recycled chemical fiber are gradually reduced, fortunately, relying on the early raw material stockpiling and polyester chip replenishment smoothly passed, coupled with 2018 is the continuation of the previous climax and the subsequent window period before the expansion of the whole line of polyester, it is still possible to make a profit with PTA and polyester ups and downs.

Figure 2 Price trend of raw recycled polyester staple fiber (hollow red, cotton green)

2019 is different, under the background of refining and chemical integration, the market is shrouded in investment and expansion expectations, polyester raw materials have fallen for a long time, and the price of primary staple fiber has collapsed and crushed recycling. Compared with the highest level in 2017, the short output of recycled polyester is initially estimated to shrink by 84,50 tons this year, of which the regeneration hollow alone has shrunk by <>,<> tons, which is a step compared with recycled ordinary fiber. With the new investment of Hengyi and Sinopec next year and the realignment of individual factories in Zhejiang, the original hollow will continue to encroach on the recycled hollow market.

It is worth mentioning that next year's native chemical fiber will also enter the stage of cost competition, and the cost advantage of the integrated device may accelerate the compression of profit space, such as the profit of more than 1,000 yuan of raw hollow yuan this year will be greatly compressed.

Figure 3 Instant cash flow of native chemical fiber

At the beginning of the year, the idea of "one-third delisting, one-third capital preservation, and one-third small profit" expected by regenerative manufacturers is increasingly reaching consensus, and delisting, transformation, and upgrading factories are also in progress. But regeneration will not disappear, in addition to the development of environmental protection concepts, as long as there is consumption, there is recycling. As for the degree of pressure on the native next year, the author plans to roughly deduce in the next review according to the different prices of oil prices and polyester raw materials, and if the psychology is bottomed, it will not be completely panic.

In the short term, polyester raw materials and chemical fibers are now in a small range fluctuation near the principal protection line, and the room for decline is limited. If there is no large fluctuation in the periphery, short-term consolidation. The price of recycled bottle flakes is difficult to press, and chemical fiber is the first.
[Author: CCF Qiao Yu]