In the medium to long term, with the completion of equipment maintenance and the subsequent commissioning of new equipment, PTA supply will return to high levels. With limited demand growth, the overall trend of PTA will still be weak.
In early August 2020, boosted by the shutdown of many domestic PTA units for maintenance, PTA futures prices continued to rise. However, due to the dual pressures of production capacity expansion and high inventory, PTA futures prices finally fell back to 3770-3780. Yuan / ton. Since the commissioning of new domestic production capacity has not yet been completed, the overall trend of PTA is expected to be weak in the future.
The actual decrease in production is limited
From the end of July to the beginning of August 2020, five sets of PTA devices with a total capacity of 4.875 million tons/year, including Ningbo Taihua, were shut down for maintenance. , Fuhai Chuang’s 4.5 million tons/year unit has also been reduced to 70% operation, and the daily operating rate of domestic PTA has dropped significantly. As of August 17, the operating rate of domestic PTA devices was 82.64%, a decrease of 6.44 percentage points from the same period in July.
Although the start-up of equipment has dropped significantly, the actual decline in PTA output has been limited due to the increase in the domestic PTA production capacity base. On June 28, 2020, the 1.25 million tons/year line of Hengli Petrochemical Line 5 was put into operation and successfully started up at one time. The other half of the 1.25 million tons/year line was completed and put into operation in early July. The effective annual production capacity of domestic PTA increased. to 54.755 million tons, an increase of 6.2 million tons from the end of 2019, an increase of 12.77%. According to calculations, from August 1 to 17, 2020, the average daily output of PTA was 128,300 tons, a decrease of 5,400 tons from the same period in July, and an increase of 13,600 tons from the same period in 2019; the cumulative output reached 2.1806 million tons, a decrease from the same period in July A decrease of 92,000 tons, an increase of 230,400 tons compared with the same period in 2019.
Downstream demand is restricted
As new orders gradually open in winter, the situation of terminal weaving orders has improved, and the operating rate of looms has also begun to rebound. However, The high inventory at the weaving end in the early stage still limits the increase in loom start-up to a certain extent. On August 14, the operating rate of looms in Jiangsu and Zhejiang was 63.3%, an increase of 7.8 percentage points from the previous low, but there was still a gap of 8.2 percentage points compared with the same period in 2019.
The negative feedback transmitted upward in the terminal weaving market did not end with the opening of winter orders. At present, the processing profits of various types of polyester are still at a low level, and the inventory of finished products is still significantly higher than in previous years and has a tendency to accumulate again. Even if new production capacity is put into production and the early maintenance equipment is restarted, the start-up of the polyester unit will be difficult to have a significant impact due to negative feedback. Improvement, PTA demand is therefore limited. On August 14, the operating rate of domestic polyester plants was 87.68%, an increase of 1.25 percentage points from the same period in 2019.
Inventory continues to be high
According to estimates, the operating rate of domestic PTA devices in recent days has been lower than the operating rate required to ensure the balance between supply and demand. PTA social inventory It has also been destocked again for the first time in a long time. However, as the current social inventory is still close to 4 million tons per day, and the equipment maintenance is about to end, resulting in limited destocking time, PTA’s social inventory pressure is still relatively high. As of August 14, domestic PTA social inventory was 3.92 million tons, a decrease of 65,000 tons from the previous week and a significant increase of 2.442 million tons compared with the same period in 2019.
In addition, although PTA warehouse receipts have dropped significantly compared with the previous period, they are still at a high level in recent years. Since warehouse receipts will be canceled intensively in September, if there is no further decline in the remaining month or so, , then a large amount of PTA futures inventory will be converted into spot, which will bring greater pressure to the already high PTA social inventory. On August 17, the equivalent inventory of Zhengzhou Commodity Exchange PTA warehouse receipts was 774,500 tons, a significant increase of 555,000 tons compared with the same period in 2019.
In summary, as the contradiction between PTA supply and demand has eased, the market’s bullish sentiment has heated up, and the focus of PTA operations has shifted upward. However, in the medium to long term, with the completion of equipment maintenance and the subsequent commissioning of new equipment, PTA supply will return to high levels. With limited demand growth, the overall trend of PTA will still be weak. </p
