Preliminary estimate of polyester polymerization rate during Spring Festival

As New Year's Day approaches, the focus on maintenance in polyester companies for the upcoming year is increasing. However, compared to previous years, this year's maintenance estimate may be more challenging.

In terms of filament yarn, after a round of promotions in mid-December, the inventory of PFY factories have significantly decreased. Currently, if another round of promotions occurs in January and prices are favorable, there is still room for downstream restocking. From this perspective, theoretically, the inventory pressure for PFY factories during this year's Spring Festival is not significant, leading the market to believe that production cuts and maintenance may not be as urgent.

While the inventory decrease for staple fiber is not as rapid as for filament yarn, the relatively good price spread this year has seemingly increased factories' tolerance for current inventory levels. Furthermore, the market has formed a generally positive expectation for the supply and demand of staple fiber next year, resulting in noticeable support from buyers, including downstream entities and traders.

Regarding PET bottle chip, market transactions have been relatively flat in the past two months. However, due to good export orders in September, shipments have remained decent in recent months, and attention should be paid to the pressure of social inventory accumulation in January and February. Additionally, some factories underwent maintenance in November, and further maintenance will likely depend on the plans of larger manufacturers. In fact, considering the impact of facilities startup in November and the recent commissioning of new facilities, the overall space for production reduction may still be relatively limited.

Nevertheless, drawing from last year's experience with inventory accumulation and the potential negative impact on market sentiment after the Lunar New Year, some factories have decided to arrange maintenance appropriately, and some have indeed expressed intentions to do so, with some already beginning to schedule maintenance. However, as of now, there remains uncertainty regarding the specific maintenance scale or timings for some factories, including the duration, and some have postponed their maintenance plans to February.

Based on the preliminary maintenance intentions currently known and the status of some facilities undergoing maintenance, CCFGroup roughly simulates the operating rate trend for the upcoming period (the maintenance scale, start times and durations are purely subjective assessments). It appears that from early-January, polyester polymerization rate is expected to gradually decline, with a low point likely occurring around the end of the month. However, considering the uncertainty in actual downtime and starting times, the trend chart will also undergo dynamic adjustments. Additionally, since this is still an incomplete statistic, more maintenance or production cuts will inevitably occur; conversely, the possibility of some facilities reducing their maintenance volumes cannot be entirely rule out, so the values corresponding to the above operating rate should not be taken as absolute references.