2.68 million tons!
PTA circulation inventory has reached a new high!
Since the Spring Festival this year, PTA’s social inventory has always been in a state of range fluctuation, with occasional destocking, but the extent of destocking is not large. At present, PTA social inventory has once again set a new high in recent years.
This phenomenon is caused by The main reason is the imbalance between supply and demand.
Production capacity continues to expand, and accumulated inventory continues to increase
2020 is a year in which PTA’s production capacity will continue to expand. Even if a “black swan” event such as the COVID-19 epidemic breaks out, the impact on PTA’s overall production plan will be limited. In the first quarter, Zhongtai Chemical’s 1.2 million ton unit and Hengli Petrochemical’s Phase 4 2.5 million ton unit were put into operation. In July, the two production lines of the Hengli Petrochemical’s Phase 5 2.5 million ton unit also successfully produced qualified products. PTA’s domestic production capacity base reached 5885.5 Thousands of tons. The commissioning of new equipment makes it difficult for PTA to get out of the dilemma of overstocking.
The demand for polyester is poor and it is difficult to remove PTA from the warehouse
In addition to the increase in its own supply structure, weak downstream polyester demand is also an important reason for the continuous accumulation of inventory. In July, facing the pressure of high inventory, 13 polyester factories announced their plans to reduce and suspend production, but the overall production reduction was not large. Entering the traditional textile off-season, coupled with the resurgence of overseas epidemics, demand recovery is difficult to predict. Weaving companies are not very interested in purchasing. Polyester yarn production and sales continue to be light, causing polyester inventories to rise. The demand for PTA is even further reduced, making it difficult to destock PTA.
Recently, multiple sets of PTA devices have begun centralized maintenance.
This includes Ningbo Taihua’s 1.2 million ton unit maintenance for two weeks, Sanfangxiang’s 1.2 million ton unit for one month, Yangzi Petrochemical’s 650,000 ton unit for two weeks on August 6, and Reignwood Petrochemical’s 1.4 million ton unit for August. In the second half of the year, the price dropped by 50%. Fuhua’s 4.5 million ton unit reduced production to 70% on August 12 and will maintain it for one week, and plans to conduct maintenance for half a month from September 15; Yisheng Ningbo’s 2.2 million ton unit plans to shut down for maintenance for two weeks on September 1. Sichuan Chemical Energy The 1 million ton plant will be inspected for two weeks starting from September 10th.
Can the centralized maintenance of PTA equipment assist its destocking?
The editor believes that this can only achieve the effect of phased de-banking, and continuous de-banking is still difficult.
After a long delay, the PTA equipment finally ushered in large-scale centralized maintenance. Equipment maintenance will naturally slow down the inventory growth, and polyester’s impact on PTA Rigid demands still exist, which can enable PTA to achieve the effect of phased de-warehousing. But negative factors still exist.
Polyester inventory is high
From China Silk Capital Network According to statistics, the overall inventory of the polyester market is now concentrated at 33-39 days; in terms of specific products, POY inventory is around 11-17 days, FDY inventory is around 22-31 days, and DTY inventory is around 30-39 days about. It can be seen that the current polyester inventory is at a high level, and the polyester operating rate remains at a high level of about 91%. There is a high probability that there will be an upward trend in the future, and the demand for PTA will be relatively reduced.
The epidemic is serious and weaving stocks are high , less orders
On the one hand, most overseas countries are currently facing the second wave of the epidemic, including Brazil, the Philippines, Spain, Germany, etc. The country has fallen back into the abyss of the epidemic, tightening restrictions again and even entering a new lockdown. The weaving market ushered in a wave of market conditions in early August. The short-term return of some orders from Europe and the Middle East does not yet represent the complete recovery of the foreign trade market. The market believes that this wave of market prices is an overdraft of the future gold, nine and silver ten markets. Coupled with the serious epidemic situation, , exports were blocked again.
On the other hand, the current order-taking situation of weaving manufacturers is still not ideal. The domestic trade market share is limited, and there are more monks and less rice. In addition to reducing production and load, most manufacturers have already exhausted their inventory. It has accumulated to a high level. According to the sample companies tested by China Silk City Network, the current inventory of gray fabrics in Shengze has reached a high of 45-46 days. If the weaving market is unsatisfactory, the reaction to the polyester raw material level is a negative feedback.
PTA’s inventory has reached a high level, and the equipment is undergoing centralized maintenance for inventory It has brought a “timely rain”, and supply and demand can improve in the short term. However, the recurrence of the epidemic is the biggest negative factor for both the weaving end and the raw material end, and even the polyester raw material end. The specific market trend of PTA still needs to control the changes in orders for the next gold, nine and silver ten.
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