Although all new devices will not be launched at once in the future, a significant increase in PTA production will be a high probability event, and the long-term PTA supply pressure will still be high.
In December, PTA futures changed from the previous weakness and showed a stronger trend. The current price rise of PTA is less influenced by its own supply and demand fundamentals and more driven by cost-side boosts such as international oil prices. Regarding the market outlook, we believe that in the short term, PTA’s own supply and demand situation will not change much, and cost-side changes will continue to be the primary factor affecting future price trends. PTA is expected to continue to maintain a oscillating and warm operation trend.
In early December, after several days of meetings, OPEC and its allies finally reached an agreement and decided to gradually increase production starting from January 2021, with the range not exceeding 500,000 barrels per day. The plan is more gradual to give the fragile oil market more time to absorb additional supply. Although this decision did not delay the production increase decision for three months as the market initially estimated, it did not appear to be the situation that the market was worried about after the JMMC failed to reach a substantive agreement-maintaining the original production increase plan, which made Market sentiment has been stabilized to a certain extent, and international oil prices have been supported.
As we enter the winter of 2020, the global COVID-19 epidemic is getting worse again. In response to the severe epidemic situation, countries such as Germany and the Netherlands have recently begun to implement strict epidemic prevention measures of “hard lockdown”, and London and Essex in the United Kingdom have also begun to upgrade their epidemic prevention levels to the highest level. The latest statistics from the World Health Organization show that on December 17, there were 642,561 new confirmed cases of COVID-19 worldwide, bringing the total number of confirmed cases to 72,851,544. In the face of the severe epidemic situation, there is good news about the new crown vaccine, which has high hopes. On December 2, the United Kingdom approved the emergency use of a new coronavirus vaccine jointly developed by Pfizer Pharmaceuticals Co., Ltd. of the United States and the German company Biotech. It began vaccination with this vaccine on the 8th, becoming the first country in the world to use this vaccine; On December 11, the U.S. Food and Drug Administration also approved the emergency use authorization application for this new coronavirus vaccine and decided to start COVID-19 vaccination from December 14. On December 16, French Prime Minister Castel announced that France would start the first phase of COVID-19 vaccination in the last week of December; the Berlin Municipal Government, the capital of Germany, issued a statement on the same day saying that Germany would start COVID-19 vaccination on December 17. . European Commission President von der Leyen said on December 15 that COVID-19 vaccinations in the EU are expected to begin in 2020, and the European Medicines Agency is expected to approve the Pfizer vaccine emergency use authorization before Christmas.
Many European and American countries, where the epidemic situation is currently the most severe, have begun to vaccinate against the new coronavirus. Boosted by this, international oil prices have continued to rise recently.
In December 2020, the only confirmed domestic device maintenance arrangements were Zhuhai BP and Fuhai Chuang, with a total annual production capacity of 5.6 million tons; the previously planned maintenance of Yisheng Hainan was 2 million tons/year The installation has once again postponed its plans to March next year. Due to limited maintenance efforts, the operating rate of domestic PTA equipment continued to remain at around 90% in the first half of December, and PTA supply continued to remain at a high level. As of December 17, the daily operating rate of domestic PTA devices was 91.06%, a decrease of 1.83 percentage points from the same period in 2019; since December, the average daily operating rate of domestic PTA devices was 92.25%, a decrease of 1.77 percentage points from the same period in 2019. . Estimated based on effective production capacity, the single-day domestic PTA output on December 17 was 142,100 tons, an increase of 18,500 tons compared with the same period in 2019; since December, the cumulative domestic PTA output is 2.4471 million tons, an increase of 321,000 tons compared with the same period in 2019 , an increase of 15.1%. The supply of PTA remains high, and there is great pressure to put new equipment into operation in the long term.
PTA’s total social inventory pressure is relatively high, and the pressure on spot inventory has eased slightly. The wave of domestic PTA production capacity expansion in 2021 has not yet ended. The Fujian Baihong, Honggang Petrochemical and Zhongjin Petrochemical units that were originally planned to be put into operation in 2020 have been postponed to 2021, resulting in a significant increase in the planned new production capacity of PTA in 2021. According to statistics, a new PTA production capacity of 11.5 million tons/year will be put into operation in the first half of 2021. If the production plan goes smoothly, assuming that the daily operating rate of the new device remains at 90%, the daily domestic PTA production will increase by approximately 28,400 tons. , an increase of approximately 19.98% compared to the current daily output. Although all new devices will not be launched at once in the future, a significant increase in PTA production will be a high probability event, and the long-term PTA supply pressure will still be high.
With the resumption of production of many sets of maintenance equipment in the early stage of November, domestic PTA supply has increased significantly, while the downstream polyester production has been difficult to progress due to the “Double 11” and the basically ended Christmas orders. This has led to a significant accumulation of domestic PTA inventories again, and social inventories have exceeded the 4 million tons mark. As of December 18, the domestic PTA social inventory was 4.334 million tons, a significant increase of 3.056 million tons compared with the same period in 2019. Specific to PTA spot inventory, it has continued to show a downward trend in recent times. The main reason why PTA spot inventory can be destocked is that a large number of PTA goods have been registered as futures warehouse receipts and entered the delivery warehouse. Since the centralized cancellation of old warehouse receipts, PTA warehouse receipt inventory has continued to increase rapidly, with the inventory increasing by more than 150% within 3 months. million tons, while during the same period social inventory increased by only 411,000 tons, that is, nearly 1.1 million tons of PTA spot inventory was converted into futures inventory.
Despite Fuhaichuang’s 4.5 million tons/year device maintenance plan, the substantial increase in production capacity in 2020 will still keep domestic PTA supply at a high level, and short-term PTA supply pressure will be relatively high.�. Since a large number of PTA goods have been registered as futures warehouse receipts, the pressure on PTA spot inventory has been alleviated. However, due to the limited futures delivery storage capacity, considering that the current PTA warehouse receipt inventory has reached a record high, the PTA inventory that can be digested by the futures end may be limited in the future. By then, PTA Spot inventory will also enter a state of accumulation again. OPEC+ finally decided to slow down its plan to increase crude oil production, which has supported international oil prices. Many European and American countries have successively started COVID-19 vaccinations, which has boosted market sentiment. International oil prices have continued to rise, which has significantly boosted PTA futures prices. Generally speaking, in the short term, PTA will be more affected by the trend of international oil prices, and the overall operation will be warm and oscillating. However, the price increase may be limited due to its own supply-side pressure. </p
