2020 is a year in which PTA’s production capacity will continue to expand. Even if a “black swan” event such as the COVID-19 epidemic breaks out, the impact on PTA’s overall production plan will be limited. In the first quarter, Zhongtai Chemical’s 1.2 million ton unit and Hengli Petrochemical’s Phase 4 2.5 million ton unit were put into operation. In July, the two production lines of the Hengli Petrochemical’s Phase 5 2.5 million ton unit also successfully produced qualified products. PTA’s domestic production capacity base reached 5885.5 Thousands of tons. The commissioning of new equipment has intensified the accumulation of PTA inventories, and the fundamentals of supply and demand have been weak. The PTA market has maintained range fluctuations recently.
PTA prices weakened and adjusted. With the contradiction between supply and demand prominent, the market is not surprised by this, but the basis is rising in a weak situation, which has hindered the decline in PTA prices. Recently, affected by the repurchase of spot goods by some mainstream PTA companies, the market basis has counterattacked in the decline. As of July 21, the PTA basis has strengthened to 09-50 to 60 yuan/ton.
2020 PTA basis trend chart:
Planned maintenance has been frequently stranded, and the huge profits have made the PTA factory red-eyed!
Higher PTA is poorly processed and manufacturers are less willing to perform maintenance. Recently, the 2.2 million tons unit of Jiaxing Petrochemical was shut down for nearly 2 weeks due to malfunction; Fuhaichuang restarted after a short stop on July 11 and is now operating at full capacity; the 2.2 million tons unit of Yisheng Petrochemical was originally planned to be shut down for maintenance in mid-July, but has not yet been There is parking news. PTA’s operating rate remains at a high level, with the weekly operating rate being 82.33%.
With the restart of Tongkun’s 2.2 million tons unit near the beginning of next week, the start-up is expected to increase again. At the same time, entering August, Ningbo Taihua and Reignwood Petrochemical, Sanfangxiang and Yangzi Petrochemical are likely to have maintenance expectations, and the pending maintenance of Yisheng Ningbo unit is not yet clear. If calculated according to maintenance, the average load of PTA in August is about 86.97%, and the supply side may show a steady but weakening trend. trend.
At present, new equipment is put into production and equipment is shut down for maintenance. The supply of PTA is generally stable, and it is difficult to get out of the inventory dilemma in the short term. . As of July 16, 2020, PTA social inventory was approximately 3.561 million tons, an increase of 12,000 tons from last week. It can be seen from the 2019-2020 PTA social inventory comparison chart that compared with last year’s smoother curve, PTA’s social inventory this year has gone from low to high, which is a process of substantial accumulation. The social inventory in the first half of the year is much higher than last year. same period level.
Weak downstream demand, and the subsequent polyester production reduction will be the focus of the market outlook
Another reason for the intensification of PTA’s accumulated inventory is the weakness of downstream demand. Affected by the public health incident, export orders have been blocked. Although domestic demand is supported, it is still a drop in the bucket. With the unsatisfactory weaving orders, there are signs of inventory at the polyester end, and cash flow is basically at a loss. Under pressure from all parties, some polyester companies have gradually announced plans to reduce production. However, this operation can be described as “loud and thunderous.” “Raindrops are light”, the production reduction plan has been gradually announced, but new polyester devices have been put into operation recently. Baihong’s 250,000-ton unit and a 250,000-ton unit in Hengyi Haining have been put into operation. Compared with the newly invested equipment of 500,000 tons, the extent of production reduction is slightly weak. However, whether the intensity of production reduction will be increased in the later period is still the focus of attention.
Overview of polyester equipment maintenance and restart table:
Taken together, although the PTA basis spread has increased slightly, the market still lacks positive support for a turning point, and the overall trend is still weak. The maintenance of PTA equipment may bring support, but warehouse receipts will be circulated to the market in August. By then, the pressure on the supply side will increase again, which will once again be negative for the PTA market. The probability that factories will continue to repurchase spot goods has also become smaller. This “east wind” does not necessarily seem to be an east wind. The reduction and restart of polyester production are still being debated, so in the short term, the contradiction between PTA supply and demand is unlikely to be eased. </p
