As the saying goes, “Agricultural products depend on supply, and industrial products depend on demand.” At present, the resumption of work in the market directly affects the demand of the industry. According to industry experts, the degree of centralization in the upstream is relatively high. The overall start-up of the PTA link increased slightly during the holidays, while about 25% of the downstream polyester production capacity was intensively overhauled during the Spring Festival.
Affected by the epidemic, the restart time of polyester shutdown equipment is generally delayed until around the Lantern Festival. The terminal weaving link is also still in a state of holiday delay. The polyester sales and downstream trading markets have opened. The market is also generally delayed. The final resumption and recovery time of polyester and downstream operations still need to consider the development of the epidemic and the degree of recovery of labor and logistics.
From the perspective of the polyester industry chain, it is still difficult to realize the expected resumption of work in the downstream. Polyester factories may consider delaying the restart of the equipment, and the operating rate may remain at 75% or even lower. If The polyester operating rate of 75% has been maintained for several months. How big a test will PTA and ethylene glycol face?
The impact of the epidemic on the polyester industry chain is more about the suppression of terminal consumption and Delays in downstream construction have led to delays in demand recovery in two ways.
First, the terminal textile industry, as a labor-intensive industry, mostly shuts down for holidays during the Spring Festival. The operating rates of looms and texturing in Jiangsu and Zhejiang dropped to 10% and below. Due to the seriousness of the epidemic, many places such as Shanghai and Zhejiang have adjusted the resumption of work to after February 9, which is about 10 days later than the original holiday time. According to the resumption of work progress in previous years, 30% can be achieved in about 7-10 days after resumption of work. operating rate.
This year’s Spring Festival is 10 days earlier than in 2019. The time for the loom operating rate in Jiangsu and Zhejiang to return to more than 30% should be about the same as last year – after mid-February, but due to the clothing Affected by the epidemic, the market may experience a continuation of the short-term downturn, which may hinder the further increase in the operating rate of looms. This means that it usually takes half a month to recover from 30% to more than 70%. This year, it may be extended to one month or more due to the transaction difference in the textile and clothing market.
Secondly, due to the unoptimistic forecast of the operating rate of terminal looms, the demand for polyester products may be further delayed, resulting in an increase in the operating rate of polyester later than It is expected that the price of polyester products may fall significantly. The polyester operating rate calculated last week was 77.7%, and the operating rate during the Spring Festival holiday should be below 75%. Polyester’s upstream raw materials are mostly integrated and scale-intensive production models. Upstream raw material production is less affected by the epidemic. The deviation between the supply side and the demand side will increase the contradiction between supply and demand, leading to an unexpected accumulation of raw material inventories. PTA and ethylene glycol prices will be suppressed in the short term. Once the epidemic is under control, the prices of various products in the polyester industry chain will see a rebound.
Regarding the duration of the impact: It is certain that the epidemic will last for at least several months. In the first quarter, March and the second quarter, regardless of whether there is an inflection point in the epidemic, it will affect terminal consumption. and export. Optimistic estimates suggest that the impact will last until the end of the first half of the year, while pessimistic estimates may extend into the second half. If the polyester operating rate is delayed, some small and medium-sized raw material factories may be forced to reduce their load and production. In previous years, the average operating rate in the last two weeks of the year was around 82%, and the average operating rate of polyester in the next half year could reach 92%. Affected by the epidemic, assuming that the operating rate remains at a low level of 75%, polyester production decreased by approximately 170,000 tons in February. , corresponding to a decrease in PTA demand of approximately 150,000 tons and a decrease in ethylene glycol demand of approximately 60,000 tons.
Every time the epidemic lasts for one more month, polyester production will be affected by about 800,000 tons, PTA demand will decrease by about 690,000 tons, and ethylene glycol demand will decrease by about 27 Thousands of tons.
1. Impact on PTA:
Starting from December 2019, due to the relatively low processing fee, the PTA market And the internal spot price almost follows the price trend of crude oil and PX. After late January, although the PTA processing gap has greatly improved, the contradiction between the cost side and the demand side is more certain on the cost side. International oil prices continued to fall amid demand panic, and PX also fell from US$792 on the 23rd to January 31st. It was $764 on the day, a week-on-week decline of 3.5%. Calculated based on the PX CFR price on January 31, the disk processing fee is calculated as 650 yuan. The main contract price of PTA2005 only considers the cost end to be around 4,700. Coupled with the expectation that the recovery time of downstream demand will be extended, it may reach a new low.
2. Effects on ethylene glycol:
Ethylene glycol Alcohol’s fundamentals were better than before. This epidemic may be an opportunity for its supply and demand fundamentals to turn from strong to weak. The accumulation of inventory during the Spring Festival is inevitable, but the recovery of downstream polyester operating rates has been delayed, and the rebound originally expected by the market may be Postponed due to the pandemic. Reasons such as transportation restrictions will also exacerbate the extent of inventory accumulation. Ethylene prices in Northeast Asia were basically stable during the holidays, and ethylene glycol was stronger than PTA in terms of cost support.
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