The Production Scale Far Exceeds FDY, And The Profit Margin Far Exceeds All Varieties! How Is Polyester POY Doing This Year?

  In 2023, the domestic polyester filament industry will continue its high capacity expansion model, with POY production scale far exceeding FDY and production capacity utilization rate higher than the industry average. However, terminal demand has not significantly improved, and the problem of supply and demand mismatch is more prominent. To alleviate inventory pressure, the profit margin of POY varieties far exceeds that of other types of varieties.
  In 2023, the domestic polyester filament production capacity will increase by more than 4 million tons, of which POY production scale accounts for 71%, and FDY production scale is less than 30%. In the past decade, due to the expansion cycle of the texturing industry, POY has been the main force in the production of polyester filament industry. This year, the expansion of leading enterprises is also mainly focused on POY, but unlike previous years, the scale of new FDY expansion devices in Jiangsu region is gradually increasing.
  As of now, the average operating rate of domestic polyester filament is 78.29%, a year-on-year increase of 5.76%. Among them, the average operating rate of POY is 79.95%, far exceeding the industry average level, while the average operating rate of FDY is 76.72%, slightly lower than POY. After experiencing a three-year growth dividend period of the epidemic, the overall export volume of clothing and textiles in China has been continuously declining this year. Among them, the cumulative year-on-year decrease in clothing exports in the first half of the year was 6.1%. In the second half of the year, clothing exports further slowed down. Despite the low base in the same period last year, the year-on-year decrease in exports from July to November expanded to -10.6%, only increasing by 2.4% compared to the same period in 2019. In November, exports amounted to 12.55 billion US dollars, a year-on-year decrease of 3%. The overall scale of China's clothing exports under traditional trade was lower than pre pandemic levels. The main application areas of polyester filament are clothing and home textiles, especially POY applications in autumn and winter clothing have a large proportion. Since the fourth quarter of this year, the geopolitical crisis has led to an increase in some shipping costs, and the recent Red Sea War has exacerbated the shipping crisis, which has affected the export situation of clothing and textiles. Therefore, a significant reduction in overseas orders has highlighted the supply pressure on domestic production enterprises.
  The monthly production of polyester filament accounts for more than two-thirds of POY, and the growth rate of terminal demand is slower than the growth rate of supply. Polyester filament manufacturers frequently use the model of discount promotions to drive production and sales data, especially the POY variety is the main promotion variety. Therefore, overall profitability of POY is lower than that of FDY throughout the year. Taking December as an example, the average cash flow loss of POY is around 100 yuan, while FDY is in a slightly profitable state, with a significant gap in profitability levels.