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In the first half of 2019, my country's economic environment was severe and complex, especially the increase in external challenges and uncertainties, and the downward pressure on the chemical fiber industry increased. On the whole, the demand side continues to weaken, and the contradiction between supply and demand is prominent; the market as a whole shows a trend of rising first and then declining, with a low rebound in June; the profitability of the industry has declined significantly, and the quality of operation is generally stable, but the risk has already emerged; the degree of "integration" of the industrial chain has further deepened, and the profit of the industrial chain has been redistributed; the growth rate of investment has dropped to negative growth, and the new production capacity has decreased.

　　Basic Operation of 1. Industry

(I) production

According to statistics from the National Bureau of Statistics, the output of chemical fiber from January to June was 28.0365 million tons, an increase of 12.05 percent over the same period last year. Among them, polyester, nylon and viscose staple fiber three categories of products production growth rate of more than 10%. However, according to the statistical analysis of the Association's sample survey, the growth rate is about 8%.

Table 1 Table of chemical fiber output from January to June 2019

　　(II) demand

In the textile and clothing domestic sales growth slowed down, export pressure significantly increased, the end market performance is weak, the impact of trade friction continues, superimposed on the domestic textile clothing high inventory, the order of caution increased. The contradiction at the end of the industrial chain is still fermenting, and the starting rate of the loom plus the bomb has dropped significantly. Although the output of chemical fiber downstream main products can still maintain the growth trend, compared with January to June 2018, the growth rate of cotton blended yarn, chemical fiber yarn, cotton blended fabric and cord fabric has decreased to varying degrees.

From the perspective of chemical fiber exports, from January to June, my country's chemical fiber exports were 2.4 million tons, a year-on-year increase of 7.31 percent, and the growth rate was 0.43 percentage points higher than the same period last year. However, affected by the Sino-US trade war, China's chemical fiber exports to the United States decreased by 37% compared with the same period last year, accounting for 3.4 percentage points of total exports.

Table 2 China's export of chemical fiber products from January to June 2019

　　(III) market

Take polyester as an example. After a sharp decline in the fourth quarter of last year, the market has the willingness to rebound. At the same time, the rise in international crude oil prices has formed the support of the cost side. From January to April, the market rose slightly, but the demand was helpless. The increased pressure of the trade war between China and the United States in May led to a rapid decline in the prices of various products in the chemical fiber market. Prices fell to a low level in June, and downstream bargain hunting prompted the market to successfully bottom out. With the re-easing of the trade war after the G20 meeting, a short-term rally was formed. However, demand did not improve substantially. In July, prices returned to fundamentals and entered a downward channel.

Figure 1 Price Trend of Polyester and Its Raw Materials from January 2018 to July 2019

　　(IV) quality efficiency

Data from the National Bureau of Statistics show that from January to June, the main business income of the chemical fiber industry was 428.7 billion billion yuan, an increase of 7.1 percent over the same period last year; the total profit was 13.3 billion billion yuan, a decrease of 23 percent over the same period last year; the industry's loss reached 26.52 percent, a year-on-year increase of 4.6 percentage points, and the loss of loss-making enterprises increased by 71.5 percent. Operating income profit margin was 3.11, down 1.22 percentage points.

By industry, the total profit of the polyester industry was 5.84 billion yuan, down 37.7 percent from the same period last year; the nylon industry was 1.65 billion yuan, down 18.5 percent from the same period last year; the viscose staple fiber industry was almost in a state of overall loss, and the cellulose fiber manufacturing industry in the table included the acetate fiber industry, which had a profit margin of more than 40 percent.

Table 3 Economic benefits of chemical fiber industry from January to June 2019

With the further deepening of the integration of the industrial chain, the three links of PX-PTA-polyester enjoy an overall profit growth, but the profit space has been redistributed. In the first half of the year, the PTA link made a lot of profits.

　Industry Operation Forecast for the Second Half of 2.

The global economic growth slowdown is expected to be obvious, the overall market demand tends to be weak, the trade environment risk still exists, and the export pressure of the textile industry is more prominent.

From the cost side, the large refining project is put into production, PX domestic production release, localization rate increased, the low cost of domestic integrated refineries will further depress the processing difference of PX, from the cost side to suppress the price of PTA and polyester. PTA profits may still remain in a relatively good situation, so the probability of PTA starting load will remain high, PTA overall balance loose, the polyester market will also form a certain pressure.

From the demand side, pay attention to whether the peak season is expected to be fulfilled, but under the complex trade situation, the mentality of the terminal production link will be more cautious, the peak season is not expected to be strong, the sustainability is weak, so the overall demand is afraid to have a significant improvement.

Judging from the supply capacity of the industry, preliminary statistics show that 3.5 million tons of polyester are planned to be put into production in the second half of the year (including 600000 tons of bottle chips). Although the new increase in energy is not as good as last year, it will put greater pressure on the market in the case of sluggish demand.

On the whole, the downward pressure on the chemical fiber industry in the second half of the year is still great, and the risks and challenges remain. With the gradual implementation of the country's positive measures to promote high-quality development, the development and operation of the chemical fiber industry will also play a strong support, and the industry's own anti-risk ability and development resilience will continue to improve. What the industry needs to do is to "do its own business well", focus on resolving risks, strengthen industry self-discipline, avoid bad competition, and reasonably control the investment of new production capacity.

(Source: China Chemical Fiber Industry Association)