Short fiber futures inject new vitality into industrial development
As a part of the polyester industry chain, since this year, the short fiber industry has entered a period of capacity expansion, and the polyester short fiber industry has ushered in new changes. Recently, at the “9th Recycled Polyester (& 2021 ChinaPolyester Staple Fiber) Industry Chain Summit Forum in Hangzhou, which was specially supported by Zhengzhou Commercial Exchange, the guests attending the meeting generally believed that, The development trend of the industry is unstoppable, differentiated development is a path, and futures tools have injected new vitality into the development of the industry. The use of futures and cash combined with good cost and inventory management has become a new idea for the current stable operation of short fiber companies.
The short fiber industry is ushering in new changes in the A capacity expansion cycle
In recent years, the pattern of the polyester industry has changed significantly, with leading companies developing towards scale and integration, and this has become one of the most obvious features in this production capacity expansion cycle.
As far as the short fiber industry is concerned, although production capacity has grown slowly in recent years, it has also entered a period of substantial capacity expansion since this year. Different from conventional spinning staple fibers in the past, companies with upstream production capacity are now beginning to pay more attention to downstream layout and put more thought into differentiated staple fibers.
“Most of the newly invested production capacity of direct-spun polyester staple fiber from 2021 to 2022 is for the purpose of supporting refining and chemical integration. The overall scale of the new companies is relatively large, such as Xinfengming, Tongkun, etc. In the later period, direct-spun polyester staple fiber Fiber concentration will become more dispersed, and competition among factories will also become more intense.” Kong Lingfang, an analyst at Huarui Information, said that judging from the products invested and expanded by enterprises, spinning, filling, and non-woven are all involved, and various fields are also involved. All have entered a period of rapid expansion of production capacity.
According to Pang Chunyan, an analyst at SDIC Anxin Futures, in 2021, the domestic direct-spun polyester staple production capacity planned to be put into production will be around 1.75 million tons, and the planned production capacity growth rate will reach 22%.
“Other short fiber production capacity planned during the year will mostly be put into operation at the end of the year. Among them, Xinfengming plans to put into operation a new production capacity of 600,000 tons by the end of the year. Traditional filament companies are also involved in the short fiber industry, and the equipment is increasing in scale. to develop.” Pang Chunyan said that judging from future production plans, companies such as Tongkun, Hengli, Zhongtai, Energy Investment, and Fuhai all have plans to launch short fiber production capacity. In addition to traditional polyester companies in order to enrich their products, they also There are upstreamPTAenterprises expanding the industrial chain downwards.
“The short fiber industry will also develop towards scale and integration, and the concentration of production capacity of the equipment will also increase.”
A reporter from Futures Daily learned that new production capacity was introduced too quickly, but the expansion of downstream demand was not synchronized. This would lead to overcapacity in direct-spinning polyester staples and compressed cash flow. Subsequently, the boot load will also be suppressed.
“Since the fourth quarter of 2021, the industry has entered a period of substantial expansion of primary polyester staple fiber. The polyester staple fiber industry may enter a low-profit stage. By then, recycled polyester staple fiber production capacity may continue to be transferred and exited, and the market share is expected to continueShuffle and products remain polarized.” said Zhang Xiaozhen, analyst at GF Futures.
Kong Lingfang told reporters that after a large number of large-scale installations are put into production, the industry will inevitably face excess pressure. “In the later period, the proportion of upstream and downstream supporting companies of short fiber companies will continue to increase, either linked to the raw material end, or linked to the downstream, and they will go it alone. The pressure on businesses will increase.”
In this forum, some companies said that large companies have the advantages of scale, integration and capital, and the living space of small companies will be squeezed, and some backward production capacityFacing elimination.
It is worth mentioning that the trend of industry development is unstoppable, and different companies have different solutions.
“For short fiber companies, differentiated development is one way to go. In addition, it is a good choice to make good use of financial tools to cope with the price fluctuations caused by the production capacity expansion cycle. Hedging can be done in conjunction with the company’s production and operation activities. We must manage costs and inventory well to achieve stable development, and at the same time find a development direction suitable for the company to avoid competing on the same track with leading companies,” Pang Chunyan said.
The arrival of short fiber futures has brought effective guarantee to the stable operation of enterprises and injected new vitality into the industry. At the forum, some short fiber companies said that in the face of the new market pattern, they should embrace the futures market with an open mind, make full use of futures tools, and at the same time consolidate their downstream foundation and establish their own brands.
Company B’s futures participation and satisfaction continue to increase
Nowadays, the combination of futures and cash has been integrated into the management ideas of short fiber companies, and this also reflects the improvement of the understanding of futures by short fiber industry companies and their recognition of the functions of short fiber futures.
The reporter learned that short fiber futures are an important part of Zhengzhou Commodity Exchange’s risk management tool for the entire polyester industry chain. Half a year after its listing, the market has been running smoothly and its functions are efficient, and it is gradually being accepted and recognized by the industry.
At the forum, the relevant person in charge of Zhengzhou Commodity Exchange introduced that as of now, leading companies in the industry are actively participating in short fiber futures, and 10 of the top 15 companies in terms of production capacity have actually participated in the futures market, accounting for 47.64% of the country’s total production capacity. Legal person customers account for 56% of positions, hedging efficiencyAs a trading company, since the listing of short fiber futures, it has actively learned and made good use of the combination of futures and cash. With the upstream and downstream advantages accumulated by the company over the years, it has used its relatively mature spot sales channels to serve the terminal market well by combining price hedging and other methods. , and also promote related businesses to terminal industries, bringing benefits to industrial customers, saving their production costs, reducing order risks, and alleviating financial pressure.
According to Li Feng, downstream customer A is mainly engaged in the export trade of pure polyester sewing thread. Its export orders are often priced first and then produced. If the customer locks in the spot raw material price to hedge The risk of rising raw material prices requires a large amount of capital. “After we promote long hedging in futures to our customers, the company only uses a small amount of funds to lock in the price, and then purchases raw materials through price points and closes long positions.” Li Feng said that in this way, customers avoid the consequences of large market fluctuations. reduce risks and earn stable processing fees, which is conducive to the long-term development of the enterprise.
In addition, due to production needs, Customer B must use Sinopec brand sources. Huayicheng used mature procurement channels and conducted hedging through reasonable basis calculations, and successfully introduced delivery brand sources such as Yizheng Chemical Fiber and Tianjin Chemical Fiber into the futures market. Other non-deliverable brands have also begun to sell based on short fiber futures pricing, further increasing market liquidity, which ultimately helps terminal companies purchase low-priced Sinopec supplies at point prices, ensuring production stability while reducing the company’s costs. It is worth mentioning that among market entities, the emergence of futures dealers has injected new vitality into the short fiber market.
According to industry insiders, short fiber futures provide futures traders with the opportunity to purchase spot goods for hedging in the futures market, and then sell at a fixed price when the basis returns. It also provides short fiber factory product inventory, downstream Enterprise raw material procurement and short fiber processing fees provide good futures hedging opportunities.
The reporter learned that Yongan Capital has been involved in short fiber futures for nearly a year since the short fiber futures were listed. “The starting point for trading futures companies to participate in futures is hedging. Because our trade volume is relatively large, we often face the risk of absolute price fluctuations in inventory and forward sales of goods. Through basis hedging, we can make up for the loss of spot price declines.” “In the view of Fei Yang, futures and cash manager of Yongan Capital, compared with the traditional trade model, the combination of futures and cash can enable companies to have better ability to fight against systemic risks. In addition, the trading model that combines futures and cash can provide more effective services to downstream customers.
He told the Futures Daily reporter that Yongan Capital currently uses short fiber futures to sign long-term contracts with some short fiber factories for processing fees, and supplies ethylene glycol and PTA to those short fiber factories every month. When the average price of raw materials On top of that, a fixed processing fee is added to purchase PF spot goods. “Through this model, the profits of short fiber factories can be stabilized.”
The reporter learned that in the face of this year’s short fiber market environment, especially the rising market in February, some customers in the terminal industry, including traders, changed their previous full-price purchases to lock in prices and hedge sales orders. Instead of bringing risks, it is reasonable to use the futures market for hedging.
Currently, the short fiber industry is facing new changes. Production capacity expansion and competition are inevitable. Making good use of short fiber futures can help companies gain vitality in the fierce competition. “As the epidemic gradually improves, social demand for short fiber is expected to increase in the second half of the year, and more companies will participate to prevent the risks of companies’ sold orders.” Li Feng said.
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