Affected by the cost side, from the beginning of December 2019 to now, the pta2005 contract has risen from 4800 yuan / ton to 5150 yuan / ton and then fell back. At present, it hovers around 4900 yuan / ton. For the aftermarket, the author analyzes as follows:
PX excess may increase
In 2019, in addition to the 4.5-million-ton PX super large unit put into operation by Hengli refining, Fuhai will resume production of 1.6-million-ton unit, Liaoyang will expand its capacity by 200000 tons, Sinochem Hongrun’s 600000-ton and Hainan Refining & Chemical’s 1-million-ton new units will be put into operation successively. With the release of new production capacity, PX’s profit has declined from a high level, and some enterprises have been in a state of loss.
|ferric sulfate (Poly ferric sulphate)|
From the end of 2019 to 2020, new PX devices are still planned to be put into operation. Hengyi’s 1.5 million ton capacity plant has been opened in November 2019, and Zhejiang Petrochemical’s 4 million ton capacity super large plant is expected to be opened in the first half of 2020. In addition, Saudi Arabia also plans to put into operation a new PX plant with a capacity of 850000 tons. Fuhai group, Sinochem Hongrun, Sinochem Quanzhou phase I, Ningbo CICC, etc. all plan to put PX capacity into operation. The degree of PX supply surplus in Asia may intensify in 2020, and the price difference profit will be further compressed. In the new year, the survival of PX storage devices in Asia is facing a test. Medium and high cost storage devices with a low degree of integration will be forced to cut production and give up market share to new integrated devices, and new devices will also be forced to carry out appropriate output increment control.
PTA new units are put into operation successively
In 2019, the total production of PTA in China was 44.43 million tons, an increase of 9.27% year-on-year. The production in 2020 is expected to be higher than that of last year, mainly due to the high profit of PTA production in the first half of 2019, the overload production of the factory and the large number of units put into operation in that year. By the end of 2019, PTA social inventory exceeded 1.4 million tons, which was at a high level. In the first quarter of 2020, although Yisheng device was overhauled, 1.2 million tons of devices of Zhongtai and Hengli were put into operation successively, and PTA supply capacity is beyond doubt. After the Spring Festival, PTA social inventory will continue to accumulate.
Poor downstream demand
|Azodicarbonamide (AC foaming Agent)|
Due to the influence of high production capacity and high starting load, compared with the past two years, the current polyester factory inventory is much higher. As of January 14, the overall inventory of polyester market is concentrated in 10-19 days. Inventory accumulation, low price, polyester factory ahead of the new year. As of January 13, the polyester operating load dropped to 76%, and in the continuous decline, the production capacity has been reduced plus the planned production reduction, totaling more than 12 million tons. This week is the time for weaving factories to have a centralized holiday. The starting load of looms may fall to the lowest point in the year. In addition, in recent years, China’s textile industry is facing a more severe external situation, with its export profit margin falling month on month, and the main export markets, Europe, the United States and Japan, lack of orders.
Poor terminal demand, poor weaving start-up load and fabric price, polyester start-up load and profit, inhibit the downward transmission of price, and even suppress PTA price upward.
Generally speaking, crude oil will boost PTA price in the future, but at present, the logic of oil price operation is not clear, PTA price is under pressure, and it is expected to be weak oscillation.