The PTA factory is not profitable, and the focus of subsequent operations depends on the price of crude oil. Considering that crude oil prices are expected to rise, the center of gravity of the PTA far-month contract is also expected to rise.
The PTA project of Sichuan Energy Investment and Xinfengming has been successfully put into operation, with the current effective production capacity reaching 47.96 million tons. The rapid increase in production capacity has led to a significant compression of industry profits. PTA processing fees have dropped from 1,187 yuan/ton in the first half of the year to 335 yuan/ton. Regarding the market outlook, the author’s analysis is as follows:
Supply pressure increases
In October, domestic PTA production was 3.6894 million tons, a year-on-year increase of 12.5%; from January to October , the total output was 36.8755 million tons, a cumulative increase of 9.08%. It is estimated that for the whole of 2019, the total output of PTA will be 44.43 million tons, a year-on-year increase of 9.27%. This year’s output is significantly higher than last year for two main reasons: first, PTA production was highly profitable in the first half of the year, and some factories were overloaded; second, there were too many new production devices.
At present, the comprehensive load of the PTA device is 85.48%. In the later stage, Xinjiang Zhongtai’s annual output of 1.2 million tons and Hengli Phase IV’s annual output of 2.5 million tons are planned to be put into operation, but only the Hanbang Petrochemical and Sanfangxiang units have maintenance plans. When the new device is put into operation, the growth rate of PTA production capacity will reach 15%. 2020 is a big year for the release of PTA production capacity, and supply pressure is increasing marginally.
Downstream consumption was weak before the Spring Festival
Starting from the second half of 2016, the operation of polyester factories improved significantly, and the industry prosperity rebounded. In 2017, the high prosperity of the polyester industry has been well continued, specifically as follows: high load and high profit. Driven by high profits, polyester production capacity will be released intensively in 2018 and 2019. However, polyester is an intermediate link after all, and the final growth rate must match the growth rate of terminal textiles. In the past three years, the release rate of polyester production capacity has been significantly higher than that of chemical fiber yarns. Therefore, the ability of polyester factories to provide downstream premiums has weakened, and the operating load of polyester factories has gradually declined. As of December 20, the operating load of the polyester factory was 86.05%, and the profits of POY, DTY and FDY were -263 yuan/ton, -338 yuan/ton and -263 yuan/ton respectively.
This year’s Spring Festival comes earlier. At present, orders for terminal weaving factories are coming to an end. The operating load in Jiangsu and Zhejiang has dropped to 68%. Later texturing and weaving factories will also be closed for holidays. Polyester factory production reduction plans are coming out one after another. The polyester filament device maintenance plan involves 6.89 million tons of production capacity, of which 2.65 million tons are involved in December, accounting for 38.46% of the total maintenance capacity. The production reduction is concentrated during the Spring Festival. After the Spring Festival, the shutdown equipment will be restored one after another. Production.
The processing fee is at a low level
At present, the PTA processing fee is 350 yuan/ton, the PX-N price difference is 263 US dollars/ton, and the PTA and PX factories are at a low level. Small profits or even losses. PTA processing costs are often affected by factors such as device scale, technology, investment cost, etc., and are mainly divided into three categories: one is for devices with a scale of less than 1 million tons, with a processing cost of 700-900 yuan/ton; the other is for devices with a scale of less than 1 million tons; – 1.5 million tons of devices, most of which were put into production after 2010, with processing costs of 600-700 yuan/ton; the first category is devices with a scale of more than 1.5 million tons, with processing costs of 400-600 yuan/ton. Devices such as Yisheng, Hengli, and Xinfengming already have relatively low processing costs, but they are still at a slight loss. In the later stage, the price of crude oil determines the value level of PTA. The deepening production reduction agreement reached by OPEC+ will help restore the balance of supply and demand, and the growth rate of U.S. production is expected to slow down, and crude oil prices may slowly rise.
In summary, although oversupply suppresses processing profits, at the current position, PTA plants are not profitable, and the focus of subsequent operations depends on crude oil prices. Considering that crude oil prices are expected to rise, the focus of the far-month contract is also expected to rise. In terms of operation, sell near and buy far for arbitrage. </p
