Cotton into the era of high prices polyester staple fiber to catch up

Since the beginning of this year, domestic cotton prices have risen from less than 14,000 yuan/ton at the beginning of the year to the current 26,000 yuan/ton, and the cotton price has hit a new high in 15 years. As an alternative to cotton, the price of polyester staple fiber has also come out of the price gap, and it has begun to enter the cycle of rising prices.

Everbright Securities analysis said that in the first half of the year, the reduction of cotton production was the main factor driving the market's rise. In the second half of the year, strong consumption has become a new engine for the rise of cotton prices. Judging from this, the “high cotton price era” of the cotton market has arrived.

It is understood that in spinning raw material consumption, cotton accounts for about 50%, polyester staple fiber is about 35%, viscose staple fiber is 7%-10%, and the remaining share is occupied by other raw materials. Both cotton and chemical fiber have alternatives and complementary consumer relations. High cotton prices will increase the use of polyester staple fibers and viscose staple fibers. High prices of chemical fiber will seal the downside of cotton.

China Everbright Securities Researcher Wang Xixin explained that there are certain cross-application areas that can be mutually replaced between cotton and chemical fiber, and the competitive process of “advance and retreat” with price as leverage often occurs in this cross application field.

Simply calculate an account. At present, the domestic demand for cotton is over 10 million tons, and the gap is about 3.5 million tons. It is assumed that 5% of the cotton is replaced by polyester staple fiber, which is equivalent to the demand for polyester staple fiber increased by 500,000 tons, while the domestic production capacity of polyester fiber staple fiber is large. It is 5.8 million tons, plus 2.8 million tons of small and medium-sized chemical fiber, with a total capacity of about 8.6 million tons. From this point of view, the high price of cotton will directly lead to a 5.8% increase in demand for the staple fiber industry.

It is reported that the price of cotton has soared recently, and companies have begun to increase the use of polyester and viscose fiber to avoid risks. On the other hand, this will in turn promote the demand for polyester and viscose fibers, which in turn will drive up prices.

Judging from the price trend, the price of polyester staple fiber has been in the fluctuation range in the first half of this year. From the beginning of the year to September, the price remained at around 10,000 yuan/ton. At present, the off-season has passed, and many research institutions have concluded that the worst period of the chemical fiber industry has passed this year. The near-term electricity, suspension of maintenance, and rising raw material prices have also provided effective support for their prices.

Affected by the growth of downstream demand and export recovery, the polyester staple fiber industry has seen an upward trend since the third quarter. At present, the price of polyester staple fiber has risen to 13,000 yuan/ton. From the perspective of the ton price difference between cotton and polyester staple fiber, it has been expanded to 10,000 yuan, and from a historical point of view, the normal price difference should be between 3000-4000 yuan / ton. Such a huge spread means that the amount of polyester substitute cotton will gradually increase, and demand will increase in the next year.

It is understood that the new polyester fiber staple fiber project investment cycle in more than 15 months, it can be seen that the next 1-2 years of production capacity is difficult to improve. With the strong demand, polyester staple fiber began to enter the upward cycle.