Development cycle of China's polyester industry and market evolution trends
——Ni Guomiao, Lead analyst of CCFGroup
His report mainly covers three parts:
1. Industry development stages: Mr. Ni outlined the growth stages of the polyester industry, including export and domestic sales conditions, as well as the commissioning of new facilities. He pointed out that the polyester industry in China has experienced over 20 years of rapid growth and is currently in the second stage of growth, characterized by slowing demand growth, industry reshuffling, the formation of leading enterprises, increased capacity concentration and gradually complete industrial chain integration. Currently, domestic sales growth is weakening, but there is still some resilience from earlier periods. Due to issues such as industrial transfer and trade friction, the growth rate of China's textile and apparel exports is gradually slowing. Although there is an opportunity to leverage exports, export profits are still declining.
2. Industry structure evolution: Mr. Ni analyzed various aspects, including industrial structure, equipment, capacity, layout, and exports. He believed that the demand for polyester products is resilient and cost-effective, and that polyester filament yarn can lead the development of the polyester and chemical fiber industries. Leading polyester enterprises have significantly improved industry concentration through horizontal development, while vertical development has complemented raw material shortages, transitioning the industry from competition in single segments to competition across the entire industrial chain. In terms of industrial layout, the capacity share of polyester in Jiangsu and Zhejiang provinces is declining, while the capacity share in other provinces is increasing. Additionally, in the context of escalating trade frictions, more chemical fiber companies are choosing to expand overseas.
3. Industry cycle and future outlook: In this section, Mr. Ni pointed out that the capacity expansion cycle of the polyester industry will come to an end starting in 2025, and the industry will experience low-speed growth in the coming years, with profits expected to slowly rise from the bottom. From the perspective of different products, the expansion phase for filaments, staple fibers, and PET bottle chip will come to an end in succession. Looking ahead, the demand growth for PET bottle chip is expected to outperform that of the textile and apparel sector. Mr. Ni also mentioned that after 2025, the domestic polyester industry will gradually enter a mature stage, transitioning into a low-speed growth phase, but new growth points can still be sought through technological innovation and the exploration of emerging markets.
