The PTA industry as a whole is heading towards surplus, and the speed of production capacity deployment in 2021 is still relatively high. Against the backdrop of continued high levels of total social inventory, industry profits continue to be compressed. At present, the PTA spot processing fee has been reduced to less than 400. From the processing profit From a perspective, among the current domestic PTA devices, only the top few PTA factories are profitable. From a long-term perspective, PTA is already in a loss-making and capacity-reducing cycle. However, high inventory and continuous production make it difficult for PTA to expand profits by relying on improvements in its own supply and demand in the short term. The current driver of PTA’s rise still comes from PX. PX itself is also in a relative surplus cycle. However, PX, which is currently valued at a low valuation, may still have room to rise, and this is also closely related to the profit transfer of the entire refining system.
PX’s own supply and demand
PX has been in a state of loss for a long time in 2020, so the overall load at home and abroad is not high. Although PX factory inventory is still high, the continued low load and the month-on-month improvement in supply and demand have led to an overall upward trend for PX. But how far can this trend go based on the improvement of PX’s own supply and demand?
Theoretically speaking, the production of PTA is a major support for the demand for PX. Therefore, from the perspective of PTA production alone, the extent of improvement in supply and demand of PX will continue to increase in the future. However, it should be noted that PTA ultimately targets the demand for polyester. For downstream polyester, PTA’s overcapacity is an indisputable fact. Therefore, the overall PTA load will remain low in the later period to ensure that inventory does not accumulate further. Therefore, in fact, what PX needs to benchmark is the demand for polyester. Compared with PTA, when PX benchmarks polyester, we found that PX’s own production capacity is still significantly excess (calculated based on the import volume of 1.2 million tons). Therefore, from the perspective of PX itself, the continued strengthening of supply and demand requires higher supply-side adjustments. Therefore, at present, it is relatively difficult for PX to expand profits by relying on its own strengthening of supply and demand.
PX cost space
The PX-naphtha price difference is theoretically composed of several parts: toluene-naphtha; MX-toluene (PX-toluene). The former represents the direct cost of PX, and the latter represents the supply and demand of PX itself. In the above discussion, we believe that PX cannot continue to expand its profits by relying on the improvement in its own supply and demand. Corresponding to the specific link, that is, the PX-toluene link cannot continue to expand profits. Therefore, the cost space of PX still lies in the rising space of toluene.
The supply of toluene mainly comes from reforming. Naphtha is the cost factor of toluene, and the demand comes from two parts, one is oil blending demand, and the other is disproportionation demand. . In 2020, affected by the sluggish consumption of refined oil products and high inventories of pure benzene and PX, the price of toluene was once lower than the price of its raw material naphtha. With the strengthening of refined oil consumption and the bottoming out of downstream aromatics profits, the overall profit of toluene has stabilized and rebounded, bringing cost-end support to PX. So where is the end point of this round of toluene’s strength, and can it be divided into several stages? These issues determine the relative height behind the PTA.
The trend of naphtha cracking
In discussions throughout 2020, we It is believed that naphtha is the strongest variety among all oil products. The main reason is that the consumption of refined oil products suppresses the supply of refineries. The inevitable result of this logic is that heavy oil, as an oil with acceptable demand, has poor cracking performance. It is significantly stronger than conventional oils such as gasoline and diesel, while naphtha has always maintained a high premium over gasoline. Therefore, when demand begins to recover in 2021 and the entire refinery begins to follow the recovery logic, the inevitable result we see is that the near-end water premium or strong near-end cracking caused by insufficient supply in the early stage will be relatively alleviated (that is, compared with other Stronger oil products weaken), so we observe two indicators: the premium of naphtha-gasoline and the premium and discount of heavy oil.
We can see that starting from April 2020, the premium of naphtha relative to gasoline has been at a high level, and has gradually transformed into a supply and demand differentiation guide the trend of. Entering 2021, with the recovery of demand and the increase in refinery operations, it can be seen that the premium of naphtha over gasoline is gradually decreasing. Here we discovered a phenomenon: when gasoline strengthens, naphtha cracking also strengthens simultaneously. The relative strength of the two is related to the differentiation of supply and demand between the two, and the valuations are relatively synchronized to a certain extent.
Another indicator to prove the supply regression logic is the premium and discount of heavy oil. Here we simply use Singapore Taking the cracking of high-sulfur fuel oil as an indicator, it can be seen that in the logic of supply and demand recovery in 2021, the cracking price difference of high-sulfur fuel oil has gradually weakened, indicating that fuel oil with normal demand in 2020 is facing an increase in supply.
From the above two indicators, we can estimate the extent of current supply recovery.��. However, taking into account the recovery of naphtha supply after the global supply recovery and the reduced demand for naphtha after the centralized maintenance of ethylene cracking, naphtha has the possibility of downward repair valuation. The current premium of naphtha relative to gasoline is 20-20. 30 US dollars, so when the demand for diesel gradually recovers, the supply pressure will be negative for naphtha. At this time, for toluene, the cost of naphtha has a relatively downward trend. Therefore, assuming that crude oil is used as the benchmark, there is no room for imagination for the actual end point of toluene’s rise relative to the current value. Therefore, PTA will still be priced at cost crude oil in the future, and there is no room for significant increase in the short term. However, considering that every upstream link of PTA (excluding naphtha) is at the bottom of profit valuation, in fact, the current price of PTA is close to its intrinsic value, and the room for decline is limited. From a long-term perspective, gradually buying PTA at the bottom of profits can not only be used as a substitute for crude oil, but also provide room for profits to bottom out due to capacity adjustments.
Strategy: 1. When making other chemical products to compress profits, PTA can be used as a substitute for crude oil. At the same time, PTA has room for profit expansion and valuation improvement; 2. To expand chemical products When making profits, PTA can be used as a short position and has the best position transfer income among oil products currently. </p