Chemical fiber industry: the economic cycle of a typical model for the industry

China’s chemical fiber industry and production capacity has exceeded 50% of the world. In the next few years, China and India will continue to remain the world’s chemical fiber “strong” status.

To enter in 2008, due to the lower reaches of the demand slowdown, the chemical fiber industry sales growth rate of loss-making enterprises and the growth rate of loss has a significant scissors shape, “growing deficit.” By a drop in demand and the early impact of rising raw materials prices, the price of chemical fiber products have been generally close to the line costs, lower industry operating rate.

Commodity prices low price of chemical fiber products, business orders in fear

Due to the lower reaches of the textile industry’s weak bargaining power, chemical fiber industry price down very difficult. As a result, the oil price collapse, because of sluggish demand, high prices of raw materials and finished goods inventory digestion cycle longer, the level of chemical fiber industry profit margins deteriorate rapidly descending into the boom phase. With the lower reaches of the market pessimism conduction level up, the overall profit of chemical fiber levels have been inevitable decline.

This year chemical fiber enterprises are facing the deterioration of customer credit situation, security has become a money issue. Chemical fiber industry “can not account for the price period, orders for” there is a consensus, the voice. However, in high-cost, high inventory and low operating rate, there is also a great internal pressure, then do not accept orders of business is becoming a dilemma.

Industry strategy: differentiation to wear shoes do not go the same way

We believe that the chemical fiber industry at the present stage of the strategy should be taken to distinguish between market demand for products, according to the size of the products respectively, the total cost of implementation strategies and leading differentiated strategy. That is, the bulk of the conventional products such as polyester, viscose, through large-scale, standardized production, strict process control, in exchange for low-cost-effective; of high-performance, differentiated product differentiation strategy to take, do meticulous precision, Highly profitable monopoly of a small market.

2009 investment strategy

On the industry, in the global economy down, the United States and other major importing countries, economic recession, weakening demand for the background, our chemical fiber industry remained neutral rating.

On listed companies, we are more optimistic about both companies:

Chemical fiber manufacturing: a unique downstream markets, the relative demand for guaranteed high-performance differentiated products, such as Yantai Spandex.

Manufacture of chemical fiber raw materials: a relatively complete industrial chain, the development of cross-industry, has a leading anti-cyclical companies, like clouds peacekeeping shares.