China Galaxy Securities: Polyester filament supply in order, optimistic about downstream restocking momentum.

China Galaxy Securities released a research report stating that on the supply side, the peak of polyester filament production has passed, and leading companies are flexibly adjusting production rates, showing orderly characteristics in industry supply. On the demand side, on one hand, current downstream cloth inventory continues to decrease, and weaving raw material procurement is relatively low, with the expectation of demand orders gradually picking up in the second half of the year, the potential for restocking is promising. On the other hand, with current disruptions in the overseas supply chain, partial easing of trade frictions for polyester filament exports is expected to maintain strong export momentum. Since the second quarter, the average price difference of polyester filament POY and FDY has improved month-on-month, showing confidence in the industry cycle elasticity, and recommending to pay attention to Xinfengming Group (603225.SH), Tongkun Group (601233.SH), Hengyi Petrochemical (000703.SZ), etc. Key points of China Galaxy Securities are as follows: The peak of polyester filament production has passed, with orderly industry supply under self-restraint In recent years, with the support of the layout of private leading enterprises in "refining-chemical integration" and domestic consumption and export demand, the capacity of each link of PX-PTA-polyester has expanded significantly, and polyester filament as the main polyester product has entered an expansion period of production capacity. According to Sublime China Information data, the added capacity of China's polyester filament industry will be 3.03 million tons/year by 2025; China plans to add 1.65 million and 1.75 million tons/year respectively in the polyester filament industry in 2026 and 2027, with the incremental capacity significantly decreasing compared to the previous peak. At the same time, the polyester filament industry has a good self-restraint basis. Since the second quarter, affected by the US-Iran conflict, the negative feedback on the demand side has gradually emerged, leading to a reduction in production rates in the polyester filament industry, flexibly controlling industry supply. As of June 11, the weekly production rate of China's polyester filament industry was 69.2%, down 10.9 percentage points from the previous week, reaching a near ten-year low. From January to May, China's polyester filament production was 18.17 million tons, down 1.9% year-on-year. The downstream inventory remains relatively low, optimistic about the restocking momentum of polyester filament In the medium to long term, global textile and clothing consumption is resilient, with stable growth expected. From January to April, the retail sales of clothing, shoes, hats, needles, and textiles in China increased by 8.1% year-on-year; from January to May, China's cumulative export of textile and clothing increased by 0.1% year-on-year. Previously, affected by the US-Iran conflict, the international crude oil price center temporarily increased significantly, and after the crude oil price reached a high level, the downstream wait-and-see sentiment was strong, with continuous decrease in cloth inventory, weaving raw material procurement at a low level, and continuous increase in polyester filament inventory. This week, the downstream weaving restocking demand has slightly eased, and the pressure on polyester filament inventory has been alleviated. According to iFind data, the number of days of terminal weaving raw material inventory this week is 11 days, an increase of 2.4 days month-on-month; according to Sublime China Information data, this week the polyester filament factory inventory is 21.6 days, a decrease of 8.7 days compared to the previous week. The bank believes that as the Middle East geopolitical situation gradually clarifies in the future, combined with the gradual landing of autumn and winter orders in the second half of the year, the weaving side still has restocking momentum. Partial easing of trade frictions, strong growth in polyester filament exports Affected by the US-Iran conflict, the overseas supply chain has been disrupted, leading to partial easing of trade frictions for polyester filament exports. On June 8th, the Brazilian Foreign Trade Commission Management Executive Committee issued Resolution No. 910 for 2026, making an affirmative final determination of anti-dumping on polyester fiber yarn originating from China, and decided to impose anti-dumping duties of 160.04-788.35 US dollars/ton, effective for five years. However, for public interest considerations, the measure is temporarily suspended. China's polyester filament export volume was 4.35 million tons in 2025, an increase of 10.6% year-on-year, accounting for 10.3% of the apparent consumption volume. From January to April 2026, China's polyester filament export volume was 1.57 million tons, up 15.3% year-on-year. The bank believes that in the context of partial easing of export trade frictions, China's polyester filament, with stable supply and cost competitiveness, is expected to maintain strong export momentum in the future. Risk warning: Risks of significant fluctuations in crude oil prices; risks of substantial increase in industry supply; risks of significant decline in textile and clothing demand; risks of intensifying international trade frictions, etc.