Polyester polymerization rate reassessment in Jan-Feb after turnaround begins

Starting in early-January, polyester companies have gradually begun turnaround, and this week, the polyester polymerization rate has dropped to around 88%, remaining at a relatively high level, but the downward trend is gradually becoming confirmed.

Based on the latest statistical data and simulations considering the maintenance schedules, the possible trend for polyester polymerization rate in January and February is estimated as follows. It can be seen that the polyester polymerization rate in January are expected to decline gradually, with the most concentrated maintenance and production cuts occurring around mid-January, and the lowest operating rate anticipated in late-January. Theoretically, factories will start to gradually resume operations in early-February; however, based on past experiences, the actual pace of resumption may vary.

Since the current assessment is still based on the total capacity of the entire facility, the final operating rate will be calculated more precisely based on actual production, so there may be some discrepancies in the actual data. Additionally, as the rhythm of production shutdown and restart in some facilities may still have certain uncertainties, there remains the possibility of fluctuations.

Based on the above assessment, it is initially estimated that the average polyester polymerization rate will be around 85% in January, while the average operating rate in February may be around 88%. If the production resumption is delayed, the February operating rate may face a moderate downward adjustment. However, based on the current assessment, the average in January for January and February in 2025 is still expected to be higher than the same period of last year.

From the perspective of the product structure affected by production cuts and maintenance:

The statistics for PFY have already exceeded 6 million tons (starting from January, the same below), making it still the largest in total. Originally, due to unexpected strong sales in December, the operating rate of PFY plants was expected to be higher than in previous years. However, considering factors such as inventory accumulation before the Spring Festival holiday and the market's recovery after the holiday, some factories have gradually implemented maintenance or production cut plans. Ultimately, how much the operating rate can drop will depend on the actual implementation by the factories and the duration of the maintenance and production cuts. Detailed analysis is here: Operating rate simulation of direct-spun PFY companies near LNY

The production cut statistics for PSF during the Spring Festival are over 2 million tons, which is relatively less than last year. Since the second quarter, the PSF industry has entered a phase of high prosperity, with price spreads performing better than that of filament yarn and showing strong sustainability, boosting market confidence. On the other hand, there are still strong expectations for the supply and demand dynamics and economic cycles in 2025, which also provide more support. Overall, it is anticipated that the operating rate of PSF plants during this Spring Festival will be higher than the same period of last year.

There are currently no planned maintenance activities for PET bottle chip companies before the Lunar New Year, with some potentially scheduled for February. In fact, there are even plans for some facilities to start operations recently, which may lead to an increase in operating rates. However, as many facilities have already undergone maintenance or are in a state of shutdown, the actual operating rate of PET bottle chip plants in January and February may be comparable to the corresponding period of last year.

Additionally, maintenance and production cuts will also involve some facilities for PET fiber chip, films, etc. Considering factors such as workers returning home during the Spring Festival and the demand drop after downstream chip spinning plants start holiday, some polymerization facilities may also choose to implement appropriate production curtailment and reduce operating rate.