Overview:
External crude oil rose slightly last week, with Brent oil basically maintaining stability and Brent oil rising slightly. The weekly increase of 12 main contracts was only 0.07%, and the weekly increase of WTI 12 main contracts was slightly 0.44%. The main domestic SC crude oil 12 contract is still weaker than the external market, with a weekly decline of 2.02%.
European epidemic broke out again. The epidemic broke out again in the UK and France. As of the reporting period, the cumulative number of confirmed cases in the United States reached 8.3431 million, and the number of deaths exceeded 220,000. The epidemic situation in India, Brazil, and Russia is still not optimistic. Among them, the cumulative number of confirmed cases in India has reached nearly 7.5 million, with more than 60,000 new cases added in a single day.
PTA:
The average price of PTA spot prices rebounded sharply last week to 3450 yuan/ton. The main processing gap of TA disk widened to 786 last week. TA’s spot processing gap widened to 624 last Friday. Fuhua Industry and Trade’s load dropped during the week and recovered on the weekend, with the PTA load falling slightly to 87%. Polyester continues to be put into production, and although the load has declined slightly, the overall load has remained around 90%. As of last Friday, the preliminary calculation of domestic polyester comprehensive load was 90.1%. The operating rates of looms and texturing in Jiangsu and Zhejiang continued to increase significantly. As of now, the operating rates of looms and texturing are 93% and 94% respectively. It is still the highest level for the same period in history. The average monthly transaction volume of China Textile City in July was 8% higher than the same period last year. It fell sharply in August, 31% lower than last year. September was also 39% lower than last year. There were pulse-type transactions and heavy volume before the holiday as scheduled. The improvement in demand starting from the terminal continues to provide positive feedback. At present, the most serious losses for polyester are bottle chips, filament yarn has turned a profit, and staple fiber profits have continued to expand significantly, maintaining high profit levels. Crude oil fluctuated outside the market, and the PX-NPT spread was still fluctuating at a low level, reaching $128 as of last Friday. The Xinfengming Phase 2 2.2 million ton unit is expected to be put into operation this month. Pay attention to the change in trading mentality and the continuity of positive feedback from the terminal.
Ethylene glycol:
Oil-based ethylene glycol spot price The average price rose to 3,842 yuan/ton last week; the price near coal production increased slightly to 3,630 yuan/ton. The main basis of EG2101 fluctuated widely, reaching -85 as of last Friday. As of October 12, the MEG port inventory in the main port area of East China was approximately 1.302 million tons, an increase of 19,000 tons from the previous period. According to shipping reports, from October 12 to October 18, the total arrival volume of the four major ports is expected to be 123,000 tons, a significant decrease from the previous month. Shipments from the mainstream Zhangjiagang reservoir area have weakened and have rebounded slightly recently. The overall inventory is expected to be destocked in October. The overall load of ethylene glycol and the start-up of coal-making equipment dropped again. As of October 15, the overall operating load of domestic ethylene glycol was 65.36%, of which the operating load of coal-based ethylene glycol was 54.72%. Some devices are still shut down for maintenance in mid-October, and the load may drop again. Overseas: Two units in the United States are still shut down due to hurricanes and their restart plans are delayed. The restart of a 700,000-ton unit in Saudi Arabia in October has been postponed. Both domestic and foreign supply are expected to decline again, and the demand side may still maintain an operating rate of around 90%. With the continuation of positive feedback, supply will shrink simultaneously, and a rebound is still expected.
Cost and Profit
1 Raw Material Market
1.1 Crude oil, NPT, PX
Based on cfr Japan naphtha, naphtha (cfr Japan) fell slightly last week , as of last Friday it was US$399.5/ton. External crude oil prices rose slightly last week, with Brent oil basically maintaining stability. The main Brent 12 contract increased by only 0.07% on a weekly basis, and the main WTI 12 contract increased by a slight 0.44% on a weekly basis. The price difference between naphtha and Brent crude oil fluctuated and narrowed last week, reaching US$84 as of last Friday; the price difference between naphtha and WTI crude oil followed a similar trend, reaching around US$99 as of last Friday. The price of PX (cfr China) continued to rise sharply last week, and the PX-NPT spread was still fluctuating at a low level, reaching $128 as of last Friday. PX Asia and China’s operating rates have dropped significantly.
2 Cost and profit changes
The average spot price of oil-based ethylene glycol rose sharply last week, rising to 3,842 yuan last Friday. The spot price near coal production dropped to 3,630 yuan/ton. Coal-to-coal load dropped slightly again last week, and the cash flow from external ethylene production to ethylene glycol recovered to -$74/ton. The production of ethylene glycol from naphtha basically broke even, with a slight profit of about US$8. The cash flow loss of the methanol MTO production route has recently recovered slightly to 1,200 yuan/ton. After the losses of various ethylene glycol process routes increased for two consecutive weeks, they recovered again last week.
Supply
1 Equipment maintenance situation
The polyester equipment continues to be put into operation. Starting from October 1, 2020, the polyester production capacity base has been revised upward to 62.3 million tons, and Hengyi Haining has added 250,000 tons (supporting the production of polyester filament). As of last Friday, the preliminary calculation of domestic polyester comprehensive load was 90.1%.
Table 1: Recent major device changes in polyester:
Data source: CCF Zhongzhou Energy and Chemical Research So
PTA domestic equipment: The load of the 4.5 million-ton unit of Fuhua Industry and Trade dropped to around 70% during the week and has recovered recently. The PTA load was reduced to 87%.
Table 2: PTA’s recent major device changes:
Data source : CCF Zhongzhou Energy and Chemical Research Institute
Ethylene glycol device: Starting from October 2020, China’s total ethylene glycol production capacity will be 14.535 million tons, and the total coal-to-ethylene glycol production capacity will be 14.535 million tons. 5.19 million tons. Sinochem Quanzhou’s 500,000-ton unit and Shanxi Woneng’s 300,000-ton unit were newly added. Last week, the overall load of ethylene glycol and the start-up of coal-based equipment were basically stable compared with before the holiday. As of October 15, the overall operating load of domestic ethylene glycol was 65.7%, of which the operating load of coal-based ethylene glycol was 54.72%. Sinopec Wuhan’s 280,000-ton unit plans to shut down for maintenance for 2 months on Oct. 16; Sierbon’s 40,000-ton unit plans to shut down for one month on Oct. 15; Qianxi Coal Chemical Industry’s 300,000-ton unit will shut down for 5-7 days on Oct. 16. The restart of overseas maintenance has been delayed for many times, and multiple equipment maintenance plans have been added. Overseas supply is expected to be reduced again.
Table 3: MEG’s recent major device changes:
Data source: CCF Zhongzhou Energy and Chemical Research Institute
New plant commissioning status: Sinochem Quanzhou’s new 500,000-ton/year MEG plant was integrated into operation on September 20 and successfully produced polyester-grade ethylene glycol products. , currently running normally. Shanxi Woneng Chemical’s 300,000-ton/year syngas-to-MEG unit was put into operation in late August and is currently in operation. Xinjiang Tianye’s 600,000 tons/year Shihutan project, of which 200,000 tons will discharge a small amount of high-quality products; 400,000 tons will discharge some qualified products, and the device is still being debugged. The new 500,000-ton unit of Zhongke Refining and Chemical Co., Ltd. is currently in reverse operation.
2PTA Inventory
PTA Conversion Society Total inventories continued their sharp decline last week. Warehouse receipts continued to rebound slightly, PTA factory inventory fell slightly, polyester factory raw material inventory dropped slightly, and TA inventory converted from polyester finished product inventory fell sharply. Polyester product inventories have dropped significantly.
3 Ethylene glycol import and port inventory
As of October 12, the MEG port inventory in the main port area of East China was approximately 1.302 million tons, a slight increase of 19,000 tons from the previous period. According to shipping reports, from October 12 to October 18, the total arrival volume of the four major ports is expected to be 123,000 tons, a significant decrease from the previous month. Shipments from the mainstream reservoir area in Zhangjiagang are not as good as last week, but have picked up slightly recently. The overall inventory is expected to be destocked in October.
Requirements
1 Polyester
1.1 Polyester operating rate and equipment changes
Starting from October, Polyester production capacity is adjusted to 62.3 million tons/year. Hengyi Haining added 250,000 tons (supporting the production of polyester filament). As of last Friday, the polyester load dropped slightly to 90.10%, and it is expected to remain above 90% in October. Among them, the load of polyester filament increased significantly by 2.7% to 78.7%, and the filament turned a profit this week; polyester bottle flakes were the only polyester products to reduce its load. It was the off-season, and the load of polyester bottle flakes dropped significantly by 3.4% to 78.7%. At 76.40%, it is currently the only loss-making polyester product; the operating rate of direct-spun polyester shorts has remained stable at 99.30% for many consecutive weeks, which is the highest level in history. The current profit of polyester shorts is very considerable. The operating rate of polyester filament is still the lowest level in the same period in the past, but the return of profits may further increase the operating rate; the operating rate of polyester bottle flakes has dropped to the equilibrium level of the same period in the past. The fourth quarter is a period of intensive maintenance and load reduction for polyester bottle flake manufacturers. .
1.2 Polyester Inventory
As of Last Friday, the equity inventories of POY, FDY and DTY in Jiangsu and Zhejiang polyester factories were 9, 12 and 11.6 days respectively. Filament stocks continued to be destocked significantly, and profits were restored simultaneously. Polyester staple fiber stocks also dropped significantly by 2.5 days to 2 days. The average inventory of polyester bottle flakes dropped slightly to around 30 days. The inventory of polyester staple fiber remains at the lowest level for the same period in previous years; the inventory of polyester bottle flakes still maintains the highest level for the same period in previous years; the inventory of polyester filament DTY has also dropped significantly to the lowest level for the same period in previous years; the inventory of filament POY and FDY has also dropped to the equilibrium level for the same period in previous years. level.
2 Terminal situation
Last week The operating rates of looms and texturing in Jiangsu and Zhejiang increased partially. As of now, the operating rates of looms and texturing are 93% and 94% respectively. Both are the highest levels in the same period in previous years.
The inventory days of gray fabrics in sample weaving enterprises in Shengze area has currently dropped to 41 days, and the peak season has been postponed for confirmation. The average monthly transaction volume of China Textile City in July was 8% higher than the same period last year. It fell sharply in August, 31% lower than last year. September was also 39% lower than last year. There were pulse-type transactions and heavy volume before the holiday as scheduled. The positive feedback from the improvement in demand starting from the terminal continues, terminal procurement is becoming increasingly rational, and polyester production and sales are declining.
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