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Insight | Time: Jan 11 2019 4:18PM
Polymerization rate trend monitor in Jan-Feb 2019
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Since mid-Dec, polyester capacity under turnaround is as below chart shows (rough estimation). PFY is the major force, while PSF, PET bottle chip and PET fiber chip capacity is not as much.

PSF output cut back substantially in Q3 2017, whose O/R once moved down to below 60%. Stock level maintained low. Hence, after the market went steady in Dec, PSF sales ratio and profit both preserved well. The supportive stock and profit index both decides that momentum for PSF producers to curtail production is not strong.

PET bottle chip’s situation is similar. Maintenance has been quite intensive in previous stage, hence current stock level keeps low. Coupled with peak season expectation after Spring Festival holiday, few plant has production cutback plan or turnaround schedule.

PET fiber chip margin is lucrative. Since Virgin/recycled price spread narrows, PET fiber chip demand from recycled sector has become one of the major outlets.

According to polyester maintenance plans published so far, still a number of unit don't have clear state up time. We monitor them to turnaround for 20 and 30 days respectively, plus possible delay as below.

Assessed on such method, Jan polymerization rate is expected at 80-81% while Feb figure is 83%, and the corresponding polyester output is around 3.74 and 3.45 million tons. Lowest point of polymerization rate may be in end Jan, estimated at 73%. Above is theoretical calculation and actual production requires further verification. The possible variables include: maintenance plan increases or good sales leads to delayed turnaround, and the turnaround duration as well.

Polymerization rate may move in below shape if assessed on above method.

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