Overview:
External crude oil continued to rebound last week, with the main Brent 01 contract having a weekly increase of 7.65% and the WTI 12 main contract having a weekly increase of 7.02%. It showed a trend of rising and falling during the week. The sentiment was boosted by the resonance of vaccines and the extension of production cuts. However, it will still take some time for demand to recover. The rebound of the epidemic coupled with the surge in Libyan exports has put oil prices under pressure. The main contract of SC crude oil 2101 continued to rebound last week following the external market, with a weekly increase of 6.99%.
The epidemic continues to break out in Europe and the United States. The United States added more than 190,000 new cases in a single day, reaching a new high. As of the reporting period, the cumulative number of confirmed cases reached 11.226 million, and the number of deaths exceeded 250,000. The epidemic situation in India and Brazil is still not optimistic. Among them, the cumulative number of confirmed cases in India has reached nearly 8.8149 million.
PTA:
The average spot price of PTA fluctuated during the week and rose to 3,155 yuan/ton. The main processing gap of TA disk widened again to 722. TA’s spot processing spread widened slightly to 513. Hanbang’s 2.2 million-ton unit unexpectedly stopped temporarily, and the PTA load dropped significantly to 80.1%. The polyester load remained stable at above 90%.
As of last Friday, the preliminary calculation of domestic polyester comprehensive load was 90.4%. The operating rates of looms and texturing in Jiangsu and Zhejiang remained stable at a high level and declined slightly. As of now, the operating rates of looms and texturing are 91% 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 September was 39% lower than the same period last year. In October, there was a pulse-type transaction volume as expected. The transaction volume was 19% lower than last year and improved significantly month-on-month. The transaction height in November and December was limited. Polyester is currently turning a profit. Crude oil prices rose first and then fell last week, with cost support weakening. The PTA-PX spread narrowed again to 140-150. PTA profits may be transferred to downstream companies again.
Ethylene glycol:
The average spot price of oil-based ethylene glycol fell sharply to 3,610 yuan/ton; the price near coal-based ethylene glycol remained stable at 3,550 yuan /Ton. The main basis of EG2101 was strong and fluctuating. It briefly turned positive last Thursday and was -14 last Friday. As of November 9, the MEG port inventory in the main port area of East China was approximately 1.164 million tons, a decrease of 6,000 tons from the previous period.
According to shipping reports, from November 9 to November 15, the total arrival volume of the four major ports is expected to be 132,000 tons, and the arrivals at the port continue to be low. It is expected that destocking will continue in early November, and the inventory turning point may appear in late November. The start-up of ethylene glycol coal-making equipment continued to rebound, but the rebound was limited. Zhejiang Petrochemical converted part of its production capacity to PE and EB, and the domestic comprehensive load dropped slightly.
As of November 12, the overall operating load of domestic ethylene glycol was 65.78%, of which the operating load of coal-based ethylene glycol was 61.08%. Overseas: Saudi Arabia’s 700,000-ton unit is currently restarting ahead of schedule, and another 700,000-ton unit is also restarting as planned. The restart of a 300,000-ton unit in South Korea has been postponed to December, and a 720,000-ton unit in Taiwan is scheduled to be shut down for about a month on November 5. The increase in overseas supply may delay the response, but it is expected to increase. On the demand side, construction may still be around 90% in early November.
Cost and profit
1 Raw material market
1.1 Crude oil, NPT, PX
NPT (cfr Japan) first rose and then fell last week, reaching $375/ton last Friday. External crude oil continued to rebound last week, with the main Brent 01 contract rising by 7.65% on a weekly basis and the main WTI 12 contract increasing by 7.02% on a weekly basis. It showed a trend of rising and falling during the week. The sentiment was boosted by the resonance of vaccines and the extension of production cuts. However, it will still take some time for demand to recover. The rebound of the epidemic coupled with the surge in Libyan exports has put oil prices under pressure. The naphtha-Brent spread narrowed sharply to US$49 at the beginning of the week, and widened to US$61 by last Friday; the naphtha-WTI spread narrowed significantly to US$65 at the beginning of the week, and widened significantly to around US$80 by last Friday. The price of PX (cfr China) rose first and then fell following crude oil last week, falling to US$528 last Friday. The PX-NPT spread fluctuated at a low level last week, reaching US$144 last Friday. The operating rates of PX Asia and China have basically remained stable compared with last week, with a slight decrease.
2 Cost and profit changes
The average spot price of oil-based ethylene glycol fell sharply to 3610 yuan/ton. The spot price near coal production remained stable at 3,550 yuan/ton. Coal processing load has rebounded for three consecutive weeks. The rebound continued to weaken last week, and coal processing losses continued to increase slightly. The cash flow from external ethylene production to ethylene glycol increased again last week to -$81/ton. Naphtha-to-ethylene glycol remained at basic breakeven, with a slight profit of around US$11, and profits narrowed. The cash flow loss of the methanol MTO production route continued to increase to -1858 yuan/ton.
Supply
1 Equipment maintenance status
PTA domestic equipment: Xinfengming Dushan Energy 2 The 2.2 million tons PTA device in the current period was put into operation on October 19, and the PTA production capacity base was adjusted to 57.03 million tons from November. Yangzi Petrochemical’s 350,000-ton unit has been shut down since 11.3, and restart is pending; Yisheng (Dalian)’s 3.75-million-ton unit will undergo maintenance for two weeks in early November; the new unit Xinfengming Dushan Energy’s 2.2-million-ton unit is operating normally; Yadong Petrochemical’s 750,000-ton unit The device will undergo maintenance for two weeks from November 13; Hanbang Petrochemical’s 2.2 million ton device unexpectedly stopped short on November 13, and the current estimate is that the short stop will be around 1-2 days. PTA’s domestic load dropped significantly to 80.1%.
Table 1: PTA’s recent major device changes
Data source: CCF Zhongzhou Energy and Chemical Research Institute
��Glycol device: Starting from November 2020, China’s total ethylene glycol production capacity is 15.035 million tons, and the total coal-to-ethylene glycol production capacity is 5.19 million tons. A new 500,000-ton unit of Zhongke Refining and Chemical Co., Ltd. was added. Domestic supply of ethylene glycol has rebounded sharply again. As of November 12, the overall operating load of domestic ethylene glycol was 65.78%, of which the operating load of coal-based ethylene glycol was 61.08%. Sinopec Wuhan’s 280,000-ton unit plans to shut down for maintenance for 2 months on October 16; S’erbang’s 40,000-ton unit plans to shut down for maintenance for one month on October 15; Zhejiang Petrochemical’s 750,000-ton unit is converted to PE and EB, with the load reduced to around 60%. Overseas: South Asia’s 4# 720,000-ton unit was shut down on 11.5 and is expected to undergo maintenance for around 30 days; two units in Saudi Arabia with a total capacity of 1.4 million tons have recently restarted.
Table 2: MEG’s recent major device changes:
Data source: CCF Zhongzhou Energy and Chemical Research Institute
2PTA inventory
PTA-converted total social inventory fell again last week, but has not yet returned to the previous low. Warehouse receipts continued to rebound sharply, PTA factory inventory continued to decline sharply, polyester factory raw material inventory fell slightly, and TA inventory converted from polyester finished product inventory also dropped significantly last week.
3 Ethylene Glycol Import and Port Inventory
As of November 9, the MEG port inventory in the main port area of East China is approximately 116.4 million tons, a decrease of 6,000 tons compared with the previous period. According to shipping reports, from November 9 to November 15, the total arrival volume of the four major ports is expected to be 132,000 tons, and the arrivals at the port continue to be low. It is expected that destocking will continue in early November, and the inventory turning point may appear in late November.
Demand
1 Polyester
1.1 Polyester operating rate and device changes
The polyester plant continues to be put into operation. Starting from November 1, 2020, the polyester production capacity base has been revised upward to 62.6 million tons, with an additional 300,000 tons of Tongkun (supporting the production of polyester filament). Recently, the load of polyester bottle flakes has been reduced, and filament and short fiber prices have been generally stable. As of last Friday, the preliminary calculation of domestic polyester comprehensive load was 90.4%. It is expected that the downward trend may continue in late November. It is the off-season, and the load of polyester bottle flakes has continued to decline, falling again by 5.2% to 69.8% last week. With the price of raw materials falling sharply, the profit of polyester bottle flakes has returned slightly; the operating rate of direct-spun polyester shorts has remained stable at 99.30% for many consecutive weeks. , the highest level in history, and the current profit of Dishuan is still around 775. The operating rate of polyester filament yarn was the second lowest level in the same period of the past year; the operating rate of polyester bottle flakes dropped to the lowest level in the same period of the past year. The fourth quarter is a period of intensive maintenance and load reduction for polyester bottle flake manufacturers. Last week, speculative funds participated in the purchase of bottle flakes, but the real demand has not improved.
Table 3: Recent major changes in polyester equipment:
Data source: CCF Zhongzhou Energy and Chemical Research Institute
1.2 Polyester Inventory
As of last Friday, the equity inventories of POY, FDY and DTY in Jiangsu and Zhejiang polyester factories were 11.5, 13.6 and 14.7 days respectively. Filament yarn stocks have been destocked again, and filament yarn is still slightly profitable. Polyester staple fiber stocks fell again to -2.2 days. The average inventory of polyester bottle flakes dropped slightly to over 28 days. The inventory of polyester staple fiber remains at the lowest level in the same period of the past year; the inventory of polyester bottle flakes remains at the highest level in the same period of the past year; the inventory of polyester filament POY remains at the second high level in the same period of the past year; the inventory of filament FDY and DTY remains at the equilibrium level of the same period in the past year.
2 Terminal Situation
Last week, the overall operating rates of looms and texturing in Jiangsu and Zhejiang were maintained. As of now, the operating rates of looms and texturing are at 91% and 94% respectively, which are still the highest levels in the same period in previous years.
The inventory days of gray fabrics in sample enterprises in Shengze area dropped to 40 days in early November and then rose again to 40.5 days, which is still the highest level in the same period in previous years. The transaction volume of China Textile City in September was 39% lower than the same period last year. In October, there was a pulse-type transaction volume as expected. The transaction volume was 19% lower than last year and improved significantly month-on-month. Double Eleven transactions were almost not affected by the epidemic. However, there was no peak season in September this year, and the transaction volume in November and December was highly limited.
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