The Zhitong Finance App learned that Haitong International released a research report saying that according to Zhuochuang information, it is planned to park the total polyester production capacity of 1.6 million tons/year for the two installations in Xiaoshan in May due to boiler modifications. Furthermore, according to Baichuan Yingfu, Tongxiang and some factories in Jiangsu plan to reduce the load by about 10% on May 13. Since May, the operating rate of polyester filament has declined somewhat. According to Zhuochuang information, as of May 9, the operating load of polyester filament was about 85%, down 2.77 percentage points from the end of April. If subsequent load reduction plans are implemented, the operating rate of filament is expected to drop further. The parking load of filament devices has increased, and industry supply and demand are expected to improve.
It is recommended to focus on industry leaders Tongkun Co., Ltd. (601233.SH), Xinfengming (603225.SH), Hengyi Petrochemical (000703.SZ), etc.; in the context of equipment upgrading, it is recommended to focus on leading companies in the refining and chemical industry, Hengli Petrochemical (600346.SH), Rongsheng Petrochemical (002493.SZ), and Dongfang Shenghong (000301.SZ).
Haitong International's main views are as follows:
After the Spring Festival, the production and sales rate of polyester filament was relatively lackluster, and filament stocks were plentiful
After the Spring Festival, although the number of order days for downstream polyester filament weaving companies picked up, they were relatively cautious about preparing raw materials. According to Longzhong information, raw material inventories of weaving companies declined overall after the Spring Festival, falling from 16.9 days to 9.8 days. The production and sales rate of filament is relatively lackluster; the average production and sales rate after the Spring Festival is only about 48%. The overall stock of filament has accumulated. According to Wind, the average POY inventory since March has been around 29 days, up to about 28.5 days as of May 9. We expect that as the operating rate of filament falls, the pressure on filament inventory is expected to ease to some extent.
New filament production capacity will slow in 2024, and supply and demand are expected to continue to improve
According to Zhuochuang information, domestic polyester filament production capacity is expected to increase by 1.16 million tons in 2024, with a production capacity growth rate of about 2%. The growth rate of new filament production capacity is slowing down, compounded by a recovery in demand. Haitong International expects supply and demand for filament to continue to improve in 2024.
Promote equipment upgrading
In March 2024, the State Council issued the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-in”, which proposes that by 2027, the scale of equipment investment in the fields of industry, agriculture, construction, transportation, education, cultural tourism, medical care, etc. will increase by more than 25% compared to 2023; the energy efficiency of major energy equipment in key industries has basically reached the energy saving level, and the production capacity ratio of environmental protection performance reaching A level has increased dramatically, and the digital R&D and design tool penetration rate and key process digitalization rate of industrial enterprises above scale will exceed 90% and 75%, respectively. Haitong International believes that promoting equipment upgrading and transformation in key industries may affect the operating rate of related industries in the short term. In the medium to long term, it will help eliminate backward production capacity, promote an increase in the share of advanced production capacity, optimize the supply and demand pattern of the industry, and the competitiveness of leading companies is expected to further improve.
In the field of equipment in key industries, energy saving and carbon reduction, ultra-low emissions, safe production, digital transformation, and intelligent upgrading are important directions, focusing on key industries such as steel, non-ferrous, petrochemicals, chemicals, building materials, electricity, machinery, aviation, shipping, textile, electronics, etc., and vigorously promoting the renewal and technological transformation of production equipment, energy use equipment, power transmission and distribution equipment, etc. Strictly implement mandatory standards such as energy consumption, emissions, safety, etc., and equipment elimination catalogue requirements, and eliminate equipment that does not meet the standards according to law and regulations.
On January 29, 2024, the National Development and Reform Commission and others issued the “Advanced Energy Efficiency Level, Energy Efficiency Level and Entry Level for Key Energy Products and Equipment (2024 Edition)”, which includes 6 categories such as industrial equipment, information and communication equipment, transportation equipment, commercial equipment, household appliances, and lighting equipment. The energy efficiency level is divided into three levels: advanced level, energy saving level, and entry level. The energy efficiency level is not lower than the current energy efficiency level 2. Among them, industrial equipment mainly includes three-phase asynchronous motors, power transformers, industrial boilers, dust collectors, electric welders, volumetric air compressors, ventilators, submersible electric pumps, permanent magnet synchronous motors, and high-voltage three-phase cage asynchronous motors.
Risk warning: Crude oil prices fluctuate greatly; petrochemical industry sentiment declined, etc.