PTA equipment has been rarely overhauled recently, and new production capacity put into production in the early stage is gradually supplied to the market. In the first quarter of next year, new production capacity such as Honggang and Baihong will be released, and PTA supply will reach a new level. It is difficult for polyester demand to show outstanding performance around the Spring Festival next year. The contradiction between PTA supply and demand may further intensify in the future, and the market’s weak situation will continue.
Supply pressure is highlighted
Xinjiang in 2019 New devices such as Zhongtai, Hengli Petrochemical and Xinfengming have been released one after another, and the pressure on PTA supply has increased again. However, the decline in crude oil prices has reduced market costs, and PTA’s overall profit performance is good. The average spot processing fee of PTA during the year is still at a high level of 626 yuan/ton, and manufacturers are basically in a profitable situation. Although spot processing fees have fallen since the fourth quarter, for devices with upstream and downstream supporting equipment, manufacturers are still profitable at the current processing fee of about 500 yuan/ton.
In the first quarter of next year, the market also expects new production capacities such as Honggang Petrochemical and Fujian Baihong to be put into operation. The development of refining and chemical integration will intensify competition in the PTA industry, and there is a high probability that processing fees will be narrowed in the later period. event. In order to earn more profits, many devices have been postponing maintenance plans since the second quarter. Judging from the devices expected to be overhauled in December, they are mainly Hainan Yisheng, Fuhai Chuang and Zhuhai BP. The former was overhauled at the end of last year, while the last maintenance time of Fuhai Chuang and Zhuhai BP was in the first quarter of this year. They are currently processing In the context of low prices, manufacturers are more willing to increase production capacity at full capacity, and the probability of centralized maintenance in December is low. Currently, PTA’s operating load is at a high level of around 92%. Xinfengming’s newly put into production capacity has been producing products normally. Coupled with the expectation that new production capacity will continue to increase in the later period, supply pressure will restrict PTA prices.
Demand is difficult to increase
With the resumption of domestic production and operation activities in the second quarter, new domestic polyester production capacity has begun to expand steadily, with 5.44 million units in production so far. tons, the production capacity growth rate reached 9.2%, and 250,000 tons of new devices are expected to be released before the end of the year. Due to the delay in resumption of work due to the epidemic at the beginning of the year, the cumulative monthly polyester production in the first half of the year was lower than the same period last year. Although the polyester production capacity base has increased since the second half of the year, and the operating load has remained at a high level of around 87%, it is still difficult to make up for the early losses, and the production growth rate is still slow. .
After the National Day and Mid-Autumn Festival, stimulated by the “Double Eleven” orders and the expectation of a cold winter this year, the demand for polyester increased in stages. In October, polyester production hit a high of 4.8 million tons. Product inventories have declined to varying degrees, especially short fiber manufacturers experiencing negative inventory. However, after the festival effect gradually faded, the willingness of downstream purchases decreased, and the cash flow of polyester filament was compressed again, among which filament POY and FDY have entered losses.
Since weaving companies generally take holidays one month before the Spring Festival, and usually resume work around the fifteenth day of the first lunar month after the festival, it is inevitable that polyester manufacturers will accumulate inventory around the Spring Festival next year. The outbreak of the epidemic occurred at the beginning of this year, and sales of spring orders were severely affected, thus restricting the production of spring clothing next year. In the absence of more stimulus effects in the future, it will be difficult to reproduce peak demand in the future.
In short, PTA supply pressure will envelope the market in the future. It is difficult for the polyester production load to reach a new high near the end of the year. There is a high probability that PTA will continue to accumulate inventory in the later period, and the weak market pattern will not change. </p
