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Research | Time: Oct 28 2019 2:41PM
Operation and development of virgin PSF and recycled PSF
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With the development of domestic refinery, polyester feedstock and polyester products see large capacity expansion. The capacity will be released intensively during 2019 and 2022. Therefore, the supply and demand relationship, production costs and operation tempo will have new change.

With the impact from both virgin polyester capacity expansion and the overseas market, how will recycled plant operate? Will the recycled market get through the difficult time?

I. The significant change in virgin polyester
1. PX-the large capacity expansion of PX may cause lower profits and prices
2. PTA: modest oversupply in PTA, high PX-PTA spread, peak season for start-up units around 2020
3. MEG: capacity expands rapidly, showing obvious oversupply in 2019
4. Polyester products
4.1 Large ups and downs last year, while sharp downs and ups this year
4.2 Virgin PSF industry cut production actively, but the profit turned higher than virgin PFY
4.3 Virgin PSF: new way on futures
II. “Drastic change” in recycled polyester
1. Amid virgin polyester capacity expansion, overseas capacity expansion and changeful macro economy, recycled polyester is shuffling.
1.1 Squeeze from virgin polyester
1.2 Overseas squeeze: mainly in Southeast Asia and India, or in price-rising pools
2. Recycled market operation
2.1 The price recorded low, inventory depreciated largely and the market was pushed up by the raw materials later
2.2 The competitive advantages of recycled chemical fiber reduced sharply and its price spread with virgin one narrowed
2.3 The operating rate reached five-year low and capacities withdraw from the market or transfer
2.4 Issues at present: HC re-PSF shocked and close virgin PSF in a dilemma
III. Hotspots
1. Comparison with 2008
2. Why raw materials supply is so tight?
IV. Operation characteristics
V. Trend: going out, differential, high-end, toward virgin PSF, fast pace
VI. Opportunity: re-PFY

Chart 1. China PX capacity growth in 2015-2021
Chart 2. PTA Capacity in China and Asia (the Middle East included)
Chart 3. China's MEG supply and demand
Chart 4. Polyester product prices in 2019
Chart 5. Operating rate of virgin polyester fiber plants
Chart 6. Cash flow of virgin polyester fibers
Chart 7. Capacity of virgin PSF for spinning and growth rate
Chart 8. HC virgin PSF capacity and growth rate
Chart 9. HC virgin PSF and HC re-PSF capacity in 2017 and 2019
Chart10. Recycled chemical fiber prices in 2018-2019
Chart 11. Price spread between solid virgin and re-PSF
Chart 12. Price spread between HC PSF and HC re-PSF
Chart 13. HC re-PSF operating rate
Chart 14. Prices of virgin PSF and medium-grade re-PSF in 2018
Chart 15. Cash flow of re-PFY

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