Polyester cord fabric market enjoys sound supply and demand

Recently, polyester cord fabric factories collectively raised the selling price of cord fabric in November, of which 1500D quoted at 19,300yuan/mt and 1000D offered at 20,800 yuan/mt, up by 500yuan/mt over Oct.  In recent months, price of PET fiber chip declined at first but then rose, mainly in fluctuation. Price of cord fabrics kept increasing and the processing spread continued enlarging, mainly driven by ongoing sound demand for tire.

Domestic sales

According to the calculation of the data center of the Ministry of Culture and Tourism, during the Spring Festival holiday this year, 308 million domestic tourists traveled nationwide, up 23.1% year-on-year and recovered to 88.6% of the same period in 2019; during the May Day holiday, the total number of domestic tourism trips nationwide was 274 million, up 70.83% on the year and recovered to 119.09% of the same period in 2019 according to comparable caliber; During the Dragon Boat Festival holiday, 106 million domestic tourists traveled nationwide, an increase of 32.3% over the same period of last year, returning to 112.8% in the same period in 2019 according to a comparable caliber; 826 million domestic tourist trips during the Mid-Autumn Festival and National Day holidays, an increase of 71.3% on annual basis and up 4.1% than 2019 in a comparable caliber. It can be seen from the above data that the number of tourists traveling has increased significantly in 2023 compared with last year, and even some holidays have exceeded the level of 2019. In addition to the substantial increase in travel demand, the demand for visiting relatives and friends and business travel has also increased significantly in 2023. Therefore, the demand for vehicles has rose significantly this year, and the demand for tires also improved significantly.

According to the operating rate of domestic tire factories, in addition to concentrated holidays around the Spring Festival holiday and temporary reduction on each holiday, the overall operating rate is at a relatively high level in 2023, and the average run rate of this year has risen by nearly 10% compared with the same period of last year.

In addition, according to the data of the National Bureau of Statistics, from Jan to Sep this year, the output of rubber tire casings in China accumulated to 731.362 million pieces, an increase of 14.3% year-on-year. The output of each month of 2023 has increased year-on-year, with year-on-year growth at 10-30% in each month.

Export

According to customs statistics, the cumulative export volume of polyester cord fabric was 104kt from Jan to Sep in 2023, a slight decrease of 0.9% year-on-year. Among them, the export volume of polyester cord fabric was 11.5kt in Jul, a slight increase of 0.5% year-on-year; the export volume in Aug was 12.2kt, a year-on-year increase of 20.1%; the export volume in Sep was 11.9kt, up 28.1% on annual basis. Although the polyester cord exports in the first half of 2023 was smaller than the same period of last year, the export volume grew in each month of the third quarter on annual basis, especially in Aug and Sep.

Supply

Domestic demand grew greatly and stably and overseas demand presented moderate, especially with obvious growth in Q3. The overall demand for polyester cord fabric kept growing, pushing up price and profit. Therefore, polyester cord fabric producers almost all ran at full capacity in recent months. Most polyester cord fabric factories are integrated with HMLS PIY. Only some need to outsource PIY. Therefore, sales of HMLS PIY are not big on the market. When cord fabric plants run at full capacity, some cord fabric producers who sell some HMLS PIY to the market also need to purchase HMLS PIY from the market. Therefore, supply of HMLS PIY has been behind demand and price of HMLS PIY moved up. Meanwhile, price of ordinary high-tenacity PIY and low-shrinkage PIY continued reducing.

Conclusion

Supported by sound end-user demand, supply and demand of polyester cord fabrics is both sound, stimulating price of cord fabrics to keep increasing, which further pushes up price of HMLS PIY. The processing spread of HMLS PIY continues enlarging and the profit is good.