The COVID-19 epidemic that broke out at the beginning of this year swept across the country, dragging down downstream demand. PTA and ethylene glycol futures prices jumped sharply after the holiday. Although they have rebounded slightly recently, due to the general delay in the resumption of work in terminal industries this year, the contradiction between supply and demand in various links of the polyester industry chain has increased, making it difficult to get out of the weak situation in the short term.
1 PX terminal
The current PX startup rate is 77.88%, which is the same as before the Spring Festival. PX factories are mostly customers with long-term contracts, and all of them are integrated devices. Therefore, the company has not shut down for maintenance due to the Spring Festival holiday. In terms of output, PX output in January was 1.47 million tons. In early February, Hainan Phase II was completely shut down this month, so the output this month is expected to be around 1.4 million tons. However, from the perspective of demand, the PTA operation rate has dropped significantly after the holidays, and it is difficult to recover in the short term. The decrease in the PX operation rate may be a high probability event. From a foreign perspective, Japan’s JX gadgets were shut down in early January and February respectively. Therefore, due to suppressed demand, the PX operating rate has a further downward trend, both at home and abroad. In addition, in terms of profits, the current price difference between PX and naphtha remains at a neutral level of US$250/ton. It is expected that there will be no significant fluctuations in the short term. However, the drag on the demand side and the commissioning of multiple new PX units will have an impact on PX prices. The trend has caused considerable pressure.
2 PTA side
In January, PTA accumulated 500,000 tons, and in 2 The monthly accumulated inventory is expected to reach 800,000 tons, and polyester and downstream links are slowly resuming work, and demand is weak, putting PTA’s accumulated inventory under great pressure. From before the holiday to January 23, the PTA operating rate was 89.48%, but today the operating rate has dropped to 82.33%, a decrease of 7.15% from before the holiday. With the increase in accumulated storage pressure and the impact of loss pressure, it is expected that there will still be installations Maintenance/production reduction possible.
According to statistics, current data shows that PTA maintenance losses in February were around 650,000 tons. It is expected that the comprehensive load in February will be around 85% and the output will be 3.69 million tons. about. Moreover, the current PTA social inventory is as high as 2 million tons. In 2020, PTA itself had a surplus crisis, and now it has encountered the impact of this special event, and the contradiction between oversupply and demand in the entire industry has escalated.
3 Glycol end
Compared with PTA, the fundamental situation of ethylene glycol before the holiday is relatively better, and port inventory has been at a historical low. However, the epidemic has accelerated the accumulation of ethylene glycol ports. During the Spring Festival, the arrival volume in the port in 12 days was 368,000 tons. Arrivals were neutral, but the demand was blocked and the port shipments were small. As of February 12, the port inventory was 628,000 tons. tons, an increase of 181,000 tons from the previous month. In addition to supply and demand being worse than expected before the holiday, ethylene glycol is also facing the expected deterioration caused by the commissioning of new equipment. Currently, Zhejiang Petrochemical has put in materials on February 1, and the Hengli ethylene link is discharging materials, and the load is increasing. From the perspective of the balance sheet, it will still take time for ethylene glycol to accumulate significantly in the medium and long term. However, the current weak supply and demand of ethylene glycol are accelerating, and the logistics of liquefied products is limited. The commissioning of new equipment is in line with the schedule, and ethylene glycol is still relatively weak. With the post-holiday slump, there is little room for decline at the current low price of ethylene glycol. The short-term ethylene glycol operating rate has not changed much, and is generally at a medium level. However, port inventory has maintained an increasing trend due to logistics restrictions. Some downstream polyester manufacturers have been affected by the epidemic for maintenance or load reduction, and the demand for raw materials has further weakened, and terminal operations have been delayed. The operating rate remains below 10%. There is no significant short-term improvement in the supply-side inventory and the demand-side, which limits the rebound of ethylene glycol. In mid-to-late February, downstream operations will gradually resume work, and the market may usher in a turn for the better.
4 Polyester end
According to statistics, POY inventory currently lasts 15 days, FDY inventory lasts 6.8 days, and DTY inventory lasts 27.8 days. Polyester inventory is seasonally accumulated, and absolute inventory is at a relatively high level. Before the terminal returns to normal, the polyester segment is affected by the shortage of raw materials and auxiliary materials due to limited inventory and logistics, and there is the possibility of successive reductions in the load. The operating rate of the polyester filament industry has dropped to 60.89%. The market has been basically in a vacuum since the Spring Festival, and corporate inventories have increased sharply. However, downstream texturing and weaving have gradually resumed work since the end of February. In the short term, polyester filament is in a priceless state.
5 Slice end
Judging from the operating rate of polyester chips, the total national production capacity of fiber-grade polyester chips is 6.909 million tons, while the main production capacity with independent devices is about 3.5 million tons, and the load reduction during pre- and post-holiday maintenance is basically side-cutting capacity. , occupying a smaller weight, so the start-up of polyester chips is still at a high level of around 76%. From the perspective of inventory, polyester chips had the lowest inventory of polyester varieties before the holiday. However, after the holiday, the inventory of some companies rose to around 15 days, and the pressure on inventory accumulation was obvious. Although downstream chip spinning factories have certain demand, they have sufficient stock before the holiday, so their purchasing intention is not very strong at the moment. In terms of price, many polyester chip companies have not yet officially started work, and the market quotations are less. The sporadic quotations have dropped by 300-350 yuan/ton compared with before the holiday. Regarding the market situation of polyester chips in February, as logistics gradually recovers, polyester chip contract orders are normal.Although spot orders are unlikely to be boosted, the sharp accumulation of inventory may be small. At the same time, the start-up of polyester chips is expected to decline, and supply pressure may decrease. Polyester chips will maintain a volatile trend above the breakeven line.
6 Summary
Currently, the accumulated inventory pressure in all links of the polyester industry chain is relatively high. Large-scale inventory accumulation has not been avoided, and manufacturing companies have mostly adopted production restrictions. However, terminal recovery is relatively slow, and there is still a certain degree of uncertainty. The difficulty in resuming work caused by the epidemic has plagued the market. The further downstream the polyester industry chain is, the more sensitive it is to the epidemic. At present, the resumption of work of major weaving companies is mostly after mid-February, which is generally delayed. However, due to logistics restrictions and the 14-day quarantine period after workers return to work, it is optimistically estimated that weaving companies will not be able to return to normal until early March, and the production capacity of areas with severe epidemics will be It will recover later, and the short-term market is still difficult to change its decline.
</p
