Polyester Operating Condition in the Second Half of July in Terms of Cost (China)

Since entering the second half of July, the international crude oil price increased continuously, although PX price at the spot market once suddenly raised and slumped, the overall price remained high. Supported by the cost, PTA spot market price and MEG market price were both in a rising trend. The top-down transmission effect also brought support to polyester market in the perspective of cost. Polyester market price was overall increasing, and polyester chip price rebounded level by level above 9000 Yuan/ton, and polyester staple fiber price also increased to 10,000 Yuan/Ton. What is the profit level of polyester manufacturers recently? 

Polyester chip was facing small losses and the stock decreased obviously

Take a look at the price of the polyester products. The polyester products were generally polymerized by PTA and MEG, but because the categories of polyester products were a lot, and the process flow and level of all kinds of products had big differences, so the cost pricing appeared single and insufficient. Generally speaking, polyester chips products cost price = (0.86 * PTA + 0.34 x MEG) + processing fees of each product. According to the data in the middle of the month, on July 16th,     PTA discussions in the domestic market focused on 7,650 Yuan/ton, and MEG quotation in the domestic market was 7,000 Yuan/tons.

Thus we can calculate that the polyester chips cost price is about 8,959 Yuan/ton. In addition, we need to add other processing and production cost, to the state-owned enterprises, auxiliary materials and packaging costs are 312 Yuan/ton, energy consumption is 330 Yuan/ton, labor cost is 90 Yuan/ton, and depreciation and maintenance is 280 Yuan/ton, then we can conclude the processing cost (not including auxiliary materials and packaging) is 700 Yuan/ton, processing cost (including auxiliary materials and packaging) is 1,010 Yuan/ton, and the total manufacturing cost is 9,969 Yuan/ton.

As the same way, we can calculate the processing cost (not including auxiliary materials and packaging) of private enterprises is 540 Yuan/ton, processing cost (including auxiliary materials and packaging) is 850 Yuan/ton, and the total manufacturing cost is 9,809 Yuan/ton, which is less than the total manufacturing cost of the state-owned enterprises nearly 160 Yuan/ton. As we know, the polyester chips discussions are around 9,600 Yuan/ton, in terms of profits, although in nearly stage the polyester manufacturers still have a small losses, the stock of polyester factories has dropped significantly, and the stock of most manufacturers has dropped to a half month level, and the lower level is about a week. The production operation also improved compared to previous time.

PSF has a small profit space

The PSF market price also increased slightly in the second half of the month, and the market price returned above 10,000 Yuan/Ton again. In the perspective of the current production cost of PSF, direct spinning polyester staple fiber products cost price = (0.855 * PTA + 0.335 * MEG + 350 Yuan) * 1.011 + related processing fees.

According to the data of the middle of the month, on July 16th, PTA discussions in domestic market focused on 7,650 Yuan/ton, and MEG quotation in domestic market was 7,000 Yuan/tons. Thus we can calculate that PSF feedstock cost price was 9,338 Yuan/ton, plus nearly 700 or 800 Yuan related process costs. According to the above data, the mainstream polyester staple fiber market price was 10,400 Yuan/tons, so polyester staple fiber factories basically in a small profit operation state recently, and a certain part of the manufacturers had profit space. The overall stock of manufacturers also dropped compared to the previous time.

(For the reasons of the differences process control and feedstock purchasing price between each manufacturer, the above cost accounting is hard to avoid differences, so this is only for your reference.)