In 2020, the only new PX device in Asia with a production capacity of 2 million tons is Zhejiang Petrochemical. After the smooth operation of Zhejiang Petrochemical’s new production capacity, the monthly PX output increased by approximately 400,000 tons. As of now, Asia’s PX maintenance capacity is approximately 11.39 million tons, of which Some devices are temporarily shut down for unplanned maintenance. Behind the device maintenance is the prominent contradiction between PX supply and demand. As the launch of new production capacity approaches, does PX still have a chance?
Dongying Petrochemical’s 1 million tons/year PX and other projects are about to be put into trial operation
In recent days, Dongying Petrochemical’s 2 million tons/year aromatic hydrocarbon extraction, 1 million tons/year paraxylene, and 2 million tons/year project undertaken by Sinopec Refining and Chemical Engineering Construction Company Three sets of large-scale equipment including disproportionation have been put into operation, marking that the project has entered the start-up production stage.
Faced with the adverse impact of the epidemic, the Shijian Dongying Petrochemical Project Department scientifically organized and carefully deployed, accelerating the process pipeline pressure test, dynamic equipment test, and static testing of the three sets of units. The construction process such as air tightness of the equipment has achieved the high-standard delivery target of the project ahead of schedule, creating favorable conditions for the oiling of the device.
As of August 27, the project department has completed the pipeline pressure test and equipment airtight test of aromatic hydrocarbon extraction, paraxylene, disproportionation and other devices, and 24 employees participated in the construction. Working in hourly shifts, we cooperate with the owner’s workshop personnel to make various preparations before start-up, laying a solid foundation for the successful start-up of the project on schedule and the production of qualified products.
Under the large-scale production cycle, the increase in domestic supply has increased significantly
PX, as the petrochemical industry and poly As the intermediate hub of the ester industry, it plays a decisive role. Nearly 90% of China’s PX devices are catalytic reforming integrated devices, using naphtha as direct raw material, and the purchase of naphtha is explicitly restricted by the state, which to a certain extent limits the development space of domestic PX companies. In recent years, With the rapid development of the PTA industry, the demand for PX has gradually increased, and the supply of PX has also shown a steady upward trend. Especially last year, domestic PX production capacity experienced epic growth. Starting from the launch of Hengli Petrochemical’s 4.5 million tons of production capacity in 2019, China’s PX supply Ability has been effectively improved. As of now, the production capacity in mainland China has reached 24.365 million tons/year.
After the domestic 8.33 million tons PX device was put into operation in 2019, PX import dependence dropped from 59% to 50%, but Due to the centralized commissioning of large-scale refining and chemical products, 3.8 million tons of domestic equipment will be put into operation in 2020, 6.6 million tons of equipment will be put into operation in 2021, and 7.79 million tons of equipment will be put into operation in 2022. There are currently 2 million tons added in 2020, and the output has increased significantly year-on-year. In March 2020, due to higher profits and strong production willingness of enterprises, PX output increased significantly. As profits decreased, PX device maintenance increased, and output reduce. The total output of PX from January to July 2020 was 11.49 million tons, a year-on-year increase of 3.815 million tons, an increase of up to 50%. Before the release of new production capacity, the overall domestic supply will be in a phased slowdown channel. In the later period, with the successful commissioning of two sets of units in Dongying (planned to be put into operation in August) and Sinochem (planned to be put into operation in October), the output of PX will further increase.
The increase in domestic production is obvious, and import dependence has dropped
As the world’s largest demand for PX, China cannot yet achieve self-sufficiency in PX. Before the start of large-scale production in 2019, import dependence was as high as about 60%. With the spurt of domestic production capacity, import volume continues to decline, and imports Dependence is also gradually declining. As the effective output of domestic PX increases, the competition between domestic supply and imported supply has further intensified.
The picture above shows the comparison of PX import volume in the first half of 2019-2020. It is obvious that the monthly import volume of PX this year is higher than last year. Decline, only June this year was higher than the same period last year. According to customs statistics: China’s imported PX from January to June 2020 totaled 7.0494 million tons, a decrease of 856,700 tons compared with the same period last year, a year-on-year decrease of 10.84%, and the average monthly import volume was 117.43 Thousands of tons. There are two main reasons for the decrease in PX imports in 2020. First, China’s domestic and foreign trade markets have been severely affected by the new coronavirus epidemic, especially the severe international epidemic and public health emergencies. The export volume of some major exporting countries has decreased. Secondly, domestic PX production capacity has increased, and the supply gap has been filled. Zhejiang Petrochemical has a total PX production capacity of 4 million tons. A set of 2 million tons of equipment was put into operation at the end of 2019, and another set of 200 production capacity was put into operation in February this year. In theory, Zhejiang Petrochemical solves the problem. The problem of raw material supply has been solved, so the demand for PX imports has been significantly reduced.
According to importing country statistics, the import source countries changed little from January to June 2019 and January to June 2020 , South Korea, Japan, and India still rank in the top three, especially South Korea. The top position cannot be shaken. In the first half of this year, the import volume of PX from South Korea was 2.658 million tons, accounting for 38% of the total import volume. In the same period last year, South Korea’s import volume was 3.135 million tons. tons, accounting for as much as 40%. In the first half of this year, Japan’s imports accounted for 12%, slightly smaller than last year. However, in the first half of the year, India’s imports of PX accounted for 12%.��It has increased compared with last year and currently accounts for 11%. It is worth noting that Brunei is a new import source country this year. Hengyi Petrochemical’s 1.5 million tons/year PX device in Brunei was officially put into operation at the end of 2019, and all its PX is supplied to China. Most PX units are integrated refining and chemical production models. Under the linkage and complexity of operations, shutdown losses are more obvious. Therefore, most companies still choose the operation model of exchanging price for volume.
PTA leading enterprises control subsequent production capacity, and PX self-sufficiency has a long way to go
PX production capacity continues to rise. Production will also continue to increase. But from a downstream perspective, about 99.9% of PX is used in PTA. Calculated based on the PTA production growth rate of 6% in 2020 and the growth rate of 7% in 2021 and 2020, we can derive the consumption of PX in the next three years.
In just 30 years, China has gone from making clothes for 1 billion people to making clothes for 7 billion people around the world. Becoming a major apparel country is based on two basic factors: large domestic market demand and low labor costs. This is also the main reason why the United States, as the world’s largest chemical country, has not developed a complete aromatics-textile industry chain, and why countries and regions such as Japan and South Korea have not continued to extend the industrial chain downstream of PX. As a variable cost, labor is an important part of competitiveness. As China’s domestic wages rise, the garment industry’s transfer to Southeast Asia, India and other places with low labor costs is becoming a new trend.
With the rise of large-scale refining and chemical projects in China, PX production capacity will continue to increase rapidly. Most of the large-scale PX devices in the later period are leading PTA companies. The trend of self-use of PX-PTA is obvious, and the self-sufficiency rate of PX will gradually increase. However, many downstream PTA devices are also planned to be put into production. China has a long way to go on the road to self-sufficiency. </p