1. Price trend
The domestic paraxylene market price trend declined sharply in 2019, with the average price at the beginning of the year being 8,500 Yuan/ton, the average price at the end of the year was 6,700 Yuan/ton, and the annual decline was 21.18%, as can be seen from the price chart. Although the launch of ethylene glycol production capacity in 2019 was less than expected, the pressure of excess supply and demand for domestic ethylene glycol has gradually become apparent, and the spot price of ethylene glycol has hovered at a low level. Since 2019, the internal spot price of ethylene glycol has fluctuated between 4215-5420 yuan/ton, and the external price has fluctuated between 512-660 yuan/ton. The overall price center has dropped significantly compared with last year.
Among them, the price of ethylene glycol continued to decline in the first half of 2019 because the inventory of ethylene glycol at the main port in East China was running at a high level between 785,000 and 1.436 million tons, and spot liquidity was loose. ; In the second half of the year, the price of ethylene glycol rebounded, but the extent was limited. This was mainly due to the obvious decline in the load of domestic ethylene glycol units in the second half of the year, the speed of port shipments, and the destocking of ethylene glycol. The overall rebound height of glycols is still suppressed by the expected commissioning of units such as Rongxin Chemical and Hengli Petrochemical.
2. Market Analysis
Upstream raw materials offer profits while downstream demand is sluggish , the center of gravity of polyester prices continues to shift downward. As of November 16, 2019, the prices of polyester chips and polyester bottle flakes have reached 5,900 yuan/ton and 6,375 yuan/ton; the prices of polyester filament POY/DTY/FDY have reached 6,850 yuan/ton, 8,550 yuan/ton, and 6,925 yuan/ton respectively. Yuan/ton; polyester staple fiber price reached 6733 yuan/ton. The price of polyester products has dropped significantly since 2019. This is mainly due to the continuous decline in the price of upstream PTA. Affected by the Sino-US trade friction and the slowdown in domestic consumption growth, the prosperity of the terminal weaving industry has declined significantly, and the price of polyester has increased. Weak, prices hit record lows.
The commissioning of new domestic equipment has led to a significant increase in the domestic PX self-sufficiency rate, which increased to 52% from the 40% self-sufficiency rate in 2018. However, the external price of PX is also the highest in the domestic paraxylene market. important influencing factors.
Based on the annual domestic market price trend chart and the PX external price trend chart, the PX market price trend can be divided into two stages: First The first stage is from the beginning to the end of March, when the PX market price trend is rising; the second stage is from the beginning of April to the end of the year, when the PX market price is gradually declining.
The first stage is from the beginning of the year to the end of March. The domestic PX market price trend gradually increases, with the domestic price rising from 8,500 yuan/ton to 9,000 yuan/ton in March.
From the perspective of product supply, the domestic PX operating rate is more than 80%, domestic devices are operating normally, and the domestic paraxylene market price trend has increased by 5.3%. The external price of PX increased by US$100/ton from US$1,000/ton CFR Taiwan to US$1,100/ton CFR Taiwan. The increase in external price was a major support for the domestic paraxylene market, and the domestic paraxylene market price increased.
From the perspective of the industrial chain, the crude oil market price rose sharply in the first stage, from US$45/barrel at the beginning of the year to US$60/barrel. The sharp rise in crude oil prices brought favorable cost support to the domestic paraxylene market. The price trend of domestic paraxylene market is rising. The price trend of the downstream PTA market has increased slightly, with the PTA market price increasing by 8%. In addition, the first quarter is the stocking stage of the textile industry. The downstream textile industry is actively stocking up, and the demand for upstream has increased.
The second stage is from the beginning of April to the end of the year, when the PX market price gradually declines. The domestic market price drops sharply from 9,000 yuan/ton to 6,700 yuan/ton, a decrease of 25.5%. The sharp decline in domestic paraxylene market prices is mainly due to the substantial increase in domestic supply, and the lack of significant improvement in downstream demand. Domestic paraxylene prices continue to fall. In the second phase, the operating rate of domestic PX is less than 70%. Tenglong Aromatics Unit has started an 800,000-ton production line. Domestic Hongrun Chemical has added 600,000 tons of new production capacity. Hainan Refining and Chemical has added 1 million tons of new production capacity in the second phase. Hengli Petrochemical has added 1 million tons of new capacity. The production capacity is 4.5 million tons, and the start-up is 2.25 million tons. The PX unit of Yangzi Petrochemical is operating normally, the Jinling Petrochemical unit is operating smoothly, the Qingdao Lidong unit is operating at full load, the Qilu Petrochemical unit is operating normally, and the Urumqi Petrochemical unit is operating at about 50%. Domestic paraxylene The supply has increased significantly and the domestic market price of paraxylene continues to fall.
Based on the overall production capacity in Asia, PX production capacity is in a stage of oversupply, and PX market prices continue to fall. The external price of PX continues to fall due to the influence of crude oil. The external price of PX fell from US$1,100/ton to US$800/ton CFR Taiwan. The external price of PX dropped sharply by US$300/ton. The external price has a certain guiding effect on the domestic paraxylene market. Paraxylene’s dependence on foreign imports is still high, and the decline in external prices is a major negative impact on the domestic PX market.
In addition, the downstream PTA market price has dropped sharply. The domestic PTA market price has dropped from 6,600 yuan/ton to 5,000 yuan/ton, with a decline of up to 26%. The operating rate has also increased to varying degrees. The PTA operating rate is at The polyester operating rate remains at about 90%, and the textile operating rate in Jiangsu and Zhejiang remains at about 75%. The declining downstream market has a certain negative impact on the upstream PX market. Affected by domestic and foreign negative factors, the domestic paraxylene market price Keep falling.
Summary:
Ethylene glycol cost end: base��In 2020, crude oil prices have a “top” and a “bottom”, and the overall trend is volatile. We believe that it is difficult to boost ethylene glycol prices on the cost side. For ethylene glycol, the market is concerned about its cash flow cost. With the expectation of decentralized production capacity in 2020, the market is expected to continue to test the cash flow cost of oil-to-ethylene glycol at around 4,000-4,100 yuan/ton.
Ethylene glycol supply side: The launch of ethylene glycol production capacity in 2019 is seriously lower than expected, and the planned production is concentrated in the fourth quarter. In 2020, the timing of the launch of ethylene glycol production capacity is relatively scattered, with new production capacity putting pressure on almost every quarter. If the production capacity is launched as scheduled, it is expected that the supply pressure of ethylene glycol will surge. On the supply side, it is recommended to pay attention to the expected market correction caused by lower than expected production capacity.
Ethylene glycol demand side: In 2019, due to rising upstream prices and sluggish terminal demand, the launch of polyester production capacity was slow. In 2020, although the cash flow of polyester will improve slightly due to the decline in PTA prices, the terminal textile and weaving industry is expected to remain sluggish, with limited demand for polyester. According to the current production capacity deployment plan, the speed of polyester production capacity deployment has slowed down compared with the previous two years, and the growth rate of production capacity is not as fast as the growth rate of supply.
Ethylene glycol inventory side: Under the assumption that the overall supply of ethylene glycol is in excess and will continue to be impacted by overseas price-competitive supply sources, we believe that ethylene glycol will be Alcohol as a whole will show a state of accumulation, and the rhythm of accumulation will determine the price trend of ethylene glycol to a large extent.
To sum up, in 2020, ethylene glycol will face huge pressure on production capacity on the supply side, and demand will not be followed up enough. Moreover, the competitiveness of my country’s oil-based ethylene glycol is far less than that of ethylene glycol in the Middle East and other places. Under the uncertainty of production capacity, we expect that the impact of imports will still exist, and there is a greater probability of accumulation of inventory at ports.
PX Forecast for 2020:
Subject to the huge pressure on production capacity, ethylene glycol is expected to have excess supply and demand in the future. In the long term, futures prices may continue to test the cash flow cost of ethylene glycol. Preliminary predictions for 2020 The annual ethylene glycol price fluctuates within a range of 4,000-5,000 yuan/ton.
With the release of new domestic production capacity, supply continues to increase significantly. Although domestic PTA companies will still have new equipment put into production next year, Demand has increased, but the new PX production capacity is greater, including the commissioning of Zhejiang Petrochemical’s 4 million tons/year PX device, becoming the second largest PX leading company in the country. The PX self-sufficiency rate is gradually increasing, domestic imports will be significantly reduced, domestic supply and demand There has been some improvement, but the overall supply of PX in Asia is already in excess. There is huge pressure on large PX exporting countries such as Japan and South Korea. It is very likely that they will sell profits to the country and compete with domestic companies for price. Most of the new PX devices are PX-PTA-polymer. In order to support the ester industry chain, the profits of the industry chain have shifted from PX to PTA. Even if PX production losses will remain high, PX will still maintain a weak pattern in 2020, and low profits or even losses of PX will become the norm. </p
