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Insight | Time: Jun 22 2018 9:08AM
High cash flow of cationic dyeable goods may be squeezed further
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Price of cationic dyeable goods including PET fiber chip, POY and DTY increased at first and then declined year to date.

Shenghong’s 80kt/year cationic dyeable polymer unit has been offline affected by unexpected accident in Dec 2017. Coupled with the turnaround of Donghua and production curtailment of Huacheng during the Spring Festival, supply of cation goods was largely tight in Jan-Mar, 2018, and price climbed up combined with firm feedstock.

Tongkun Hengbang’s 200kt/year new cation unit started producing goods in Apr, but Hengsheng’s 100kt/year unit and Lixin’s 80kt plant were under turnaround. Overall supply of cation goods was not apparently excessive, so price was in correction.

Entering May, price of cation goods started falling rapidly with the restart of plants under turnaround earlier and the startup of 200kt/year new plant but reducing demand and excessive supply. Price gap between cationic dyeable POY 150D and PET fiber chip has narrowed to around 300yuan/mt.

Type Plant Involved capacity (kt) Remark
Adjusted capacity Shenghong 30 Intermittent producing PET fiber chip, for self- consumption
New capacity Hengbang 200 Match spinning, Mar
New capacity Hengyi 60 PET fiber chip
Restart from turnaround Donghua 60 Feb 8-28
Restart from turnaround Hengsheng 100 Mar 30-Apr 25
Restart from turnaround Lixin 80 Ape 27-May 13
Under turnaround Shenghong 80 Dec 19-end-Jun

Cash flow of cationic dyeable PET fiber chip and direct-spun fiber was both considerable in the first half of 2018, especially before price declining quickly in May. Profit of filament yarn and chip hit high in recent years, with profit for POY150D and PET fiber chip once as high as 1,000-2,000yuan/mt.

Current profit was moderate after cation products price slipped substantially in May, with profit for fiber and chip both around 1,000yuan/mt, far higher than conventional semi-dull PET fiber chip and POY.

As for market trend, Shenghong’s 80kt cation unit may resume production in end-Jun, and another new plant with 250kta capacity is planned to start operation in Oct, which may be delayed further. There is no turnaround plan temporarily. Thus, overall supply of cationic dyeable goods is expected to increase further, and cash flow is tolerable now, not ruling out cationic dyeable PET fiber chip plants and POY and DTY plants further slashing price.
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