“With the production of more than 30 new units in the polyester market in 2023, competition for polyester varieties is expected to intensify in the first half of 2024, and processing fees will be low.” For polyester bottle flakes, DTY and other varieties that are put into production more in 2023, it may be near the profit and loss line.” Jiangsu a medium-sized polyester enterprise relevant person in charge said.

 
In 2023, the “main force” of the polyester industry capacity expansion is still the head enterprise. In February, Jiangsu Shuyang Tongkun Hengyang Chemical fiber 300,000 tons located in Jiangsu Province, Tongkun Hengsuper chemical fiber 600,000 tons located in Zhejiang Zhouquan, Jiangsu Xinyi New Fengming Jiangsu Xintuo New Material 360,000 tons polyester filament equipment was put into operation. In March, Shaoxing Keqiao Hengming chemical fiber 200,000 tons located in Shaoxing, Zhejiang, and Jiangsu Jiatong Energy 300,000 tons polyester filament filament device located in Nantong, Jiangsu were put into operation…

Tongkun Group Co., LTD. (hereinafter referred to as “Tongkun Shares”) has a production capacity of 11.2 million tons of polymerization and 11.7 million tons of polyester filament, and the production capacity and output of polyester filament are ranked first in the industry. In the first half of 2023, Tongkun’s new polyester and polyester filament production capacity was 2.1 million tons.
The polyester filament production capacity of Xinfengming Group is 7.4 million tons and the polyester staple fiber production capacity is 1.2 million tons. Among them, Jiangsu Xintuo New Materials, a subsidiary of New Fengming, added 600,000 tons of polyester staple fiber from August 2022 to the first half of 2023.
Hengyi Petrochemical polyester filament production capacity of 6.445 million tons, staple fiber production capacity of 1.18 million tons, polyester chip production capacity of 740,000 tons. In May 2023, its subsidiary Suqian Yida New Materials Co., Ltd. put into production 300,000 tons of polyester staple fiber.
Jiangsu Dongfang Shenghong Co., LTD. (hereinafter referred to as “Dongfang Shenghong”) has a production capacity of 3.3 million tons/year of differential fibers, mainly high-end DTY (stretched textured silk) products, and also includes more than 300,000 tons of recycled fibers.
Statistics show that in 2023, China’s polyester industry increased production capacity by about 10 million tons, increasing to about 80.15 million tons, an increase of 186.3% compared with 2010, and a compound growth rate of about 8.4%. Among them, the polyester filament industry added 4.42 million tons of capacity.

Polyester product volume increase profit contraction enterprise profit pressure is generally prominent
“In 23 years, under the background of high production and high construction, the average price of polyester fiber fell, the volume rose and contracted, and the pressure on corporate profits was generally prominent.” Sheng Hong Group Co., Ltd. chief engineer Mei Feng said.
“The growth rate of polyester market demand is far less than the growth rate of supply, and the problem of mismatch between supply and demand of polyester filament is highlighted. Throughout the year, the overall cash flow of polyester filament is expected to repair, but it is expected to be difficult to reverse the loss situation.” Longzhong information analyst Zhu Yaqiong introduced that although the domestic polyester filament industry added more than 4 million tons of new production capacity this year, the load increase of new equipment is relatively slow.
She introduced that in the first half of 23 years, the actual production was 26.267 million tons, down 1.8% year-on-year. From the second quarter to the beginning of the third quarter, the supply of polyester filament was relatively stable, of which July to August was the high point of the year. In November, the unexpected failure of some devices led to the shutdown of the device, and some factories reduced production, and the overall supply of polyester filament decreased slightly. At the end of the year, with the downstream winter orders sold out, the demand for polyester filament decreased, and the supply showed a downward trend. “The contradiction between supply and demand has led to the continuous compression of polyester filament cash flow, and at present, the cash flow of some models of products has even suffered losses.”
Due to less than expected terminal demand, 23 years, the profit pressure of the chemical fiber industry is still prominent, but the profit situation has improved since the third quarter.
Data from the National Bureau of Statistics show that from January to September, the operating income of the chemical fiber industry increased by 2.81% year-on-year, and since August, the cumulative growth rate has turned positive; The total profit decreased by 10.86% year-on-year, which was 44.72 percentage points narrower than that in January-June. Revenue margin was 1.67%, up 0.51 percentage points from January-June.
In the polyester industry, the change in profitability can be reflected in the performance of leading listed companies.
Hengli Petrochemical Co., Ltd. achieved operating income of 173.12 billion yuan in the first three quarters, an increase of 1.62% year-on-year; Net profit attributable to shareholders of listed companies was 5.701 billion yuan, down 6.34% year-on-year. In the first half of the year, its revenue fell 8.16% year-on-year, and attributable net profit fell 62.01% year-on-year.
Hengyi Petrochemical Co., Ltd. achieved revenue of 101.529 billion yuan in the first three quarters, down 17.67% year-on-year; Attributable net profit was 206 million yuan, down 84.34% year-on-year. Among them, the revenue in the third quarter was 37.213 billion yuan, down 14.48% year-on-year; Attributable net profit was 130 million yuan, an increase of 126.25%. In the first half of the year, its operating income fell 19.41 percent year-on-year, and attributable net profit fell 95.8 percent year-on-year.
Tongkun Group Co., Ltd. achieved revenue of 61.742 billion yuan in the first three quarters, an increase of 30.84%; Attributable net profit was 904 million yuan, down 53.23% year-on-year. In the first half of the year, its revenue increased by 23.6%, and attributable net profit fell by 95.42%.

The competition of polyester varieties will intensify in the first half of the year, and bottle chips, DTY or near the profit and loss line
Obviously, the competition in the polyester market is becoming more and more fierce, and the phenomenon of “survival of the fittest” in the market is intensifying. An actual performance is that in the past two years, a number of enterprises and capacity that are not competitive enough in the polyester market have begun to withdraw.
Statistics from Longzhong Information show that in 2022, Shaoxing, Keqiao and other places have a total of 930,000 tons of polyester filament production capacity out of the market. In 2023, the long-term shuttered polyester production capacity is 2.84 million tons, and the old production capacity eliminated is a total of 2.03 million tons.
“In recent years, the supply of the polyester industry has been increasing, superimposed multiple factors, and the cash flow of polyester filament has been continuously compressed. In this environment, small and medium-sized enterprises, varieties of polyester enterprises more than the production enthusiasm is not high.” Zhu Yaqiong said, “In 2020-2024, it is expected that the national polyester industry’s exit (pre-exit) capacity will total 3.57 million tons, of which the polyester filament industry’s exit capacity will be 2.61 million tons, accounting for 73.1%, and the polyester filament industry has taken the lead in opening the shuffle.”
“With the production of more than 30 new units in the polyester market in 2023, competition for polyester varieties is expected to intensify in the first half of 2024, and processing fees will be low.” For polyester bottle flakes, DTY and other varieties that are put into production more in 2023, it may be near the profit and loss line.” Jiangsu a medium-sized polyester enterprise relevant person in charge said.

Sources: China Textile News, Longzhong Information, Network