Affected by the cost side, from the beginning of December 2019 to the present, the PTA2005 contract rose from 4,800 yuan/ton to 5,150 yuan/ton and then fell back. Currently, it is hovering around 4,900 yuan/ton. Regarding the market outlook, the author’s analysis is as follows:
The PX surplus is likely to intensify
In 2019, in addition to the PX with a production capacity of 4.5 million tons launched by Hengli Refining and Chemical Co., Ltd. In addition to the ultra-large units, Fuhai Chuang’s 1.6 million-ton unit has resumed production, Liaoyang has expanded its capacity by 200,000 tons, Sinochem Hongrun’s 600,000-ton and Hainan Refining’s new 1-million-ton units have been put into operation. With the release of new production capacity, PX profits have declined from highs, and some companies are already at a loss.
From the end of 2019 to 2020, PX still has new devices planned to be put into production. Hengyi’s 1.5 million-ton capacity device was started in November 2019, and Zhejiang Petrochemical’s ultra-large device with a 4 million-ton capacity is expected to be started in the first half of 2020. In addition, Saudi Arabia also plans to put into operation a new PX device with a capacity of 850,000 tons. Fuhai Group, Sinochem Hongrun, Sinochem Quanzhou Phase I, Ningbo CICC, etc. all plan to put into operation PX production capacity. The oversupply of PX in Asia may intensify in 2020. Spread profits will also be further compressed. In the new year, the survival of Asia’s PX stock devices will face a test. Medium and high-cost stock devices that are not highly integrated will be forced to significantly reduce production and give up market share to new integrated devices. New devices will also be forced to carry out a moderate amount of Output incremental control.
New PTA devices are gradually put into operation
In 2019, the total domestic PTA output was 44.43 million tons, a year-on-year increase of 9.27%. The output in 2020 is expected to be higher than Last year, the main reason was that PTA production profits were high in the first half of 2019, factories were overloaded, and there were too many units put into production that year. As of the end of 2019, PTA social inventory exceeded 1.4 million tons, which was at a high level. In the first quarter of 2020, although the Yisheng unit was undergoing maintenance, Zhongtai’s 1.2 million tons and Hengli’s 2.5 million tons units were put into production one after another. There is no doubt about the PTA supply capacity. After the Spring Festival, PTA social inventory will continue to accumulate.
Poor downstream demand
Affected by the high production capacity and operating load, compared with the past two years, the current inventory of polyester factories is higher Out a lot. As of January 14, the overall inventory of the polyester market was concentrated between 10 and 19 days. Inventories are accumulating, prices are low, and polyester factories are celebrating the New Year ahead of schedule. As of January 13, the operating load of polyester has dropped to 76%, and is continuing to decline. The production reduction plus the planned production capacity reduction totals more than 12 million tons. This week is a holiday time for weaving factories, and the start-up load of looms may fall to the lowest point in the year. In addition, in recent years, the external situation faced by China’s textile industry has been relatively severe, with export profit margins declining month-on-month, and orders from major export markets Europe, the United States, and Japan being insufficient.
The terminal demand is not smooth, and the weaving start-up load and gray cloth price, polyester start-up load and profit are not good, which inhibits the downward transmission of prices, and even suppresses the price of PTA upwards.
In general, crude oil is the one that can boost PTA prices in the future, but the current operating logic of oil prices is not clear. PTA prices are under pressure and are expected to oscillate weakly. </p
