China Fabric Factory Fabric News PTA manufacturers are facing losses, and oil-based ethylene glycol is even more “sad”. If processing fees are low until March, more production cuts will occur!

PTA manufacturers are facing losses, and oil-based ethylene glycol is even more “sad”. If processing fees are low until March, more production cuts will occur!



In the polyester raw material industry chain, processing fees are an indispensable factor in judging market sentiment. The processing fee reflects the profit of spot processing of …

In the polyester raw material industry chain, processing fees are an indispensable factor in judging market sentiment. The processing fee reflects the profit of spot processing of polyester raw materials, and is also the focus of market participants in each survey. According to industry insiders, the level of processing fees will directly affect the production enthusiasm of enterprises, and then affect prices through supply.

Although polyester products had a good start on the first day after the holiday, the upward trend failed to continue. Recently, the prices of various polyester varieties have been adjusted to varying degrees. At the same time, PTA processing fees and oil-based ethylene glycol profits have been significantly reduced to a state of loss.

PTA manufacturers face losses

Oil-based ethylene glycol is even more “sad”

Recently, PTA processing fees have shown rapid compression. It dropped from 576 yuan/ton before the Spring Festival to 306 yuan/ton, a drop of nearly 47%, a new low since May 2020. PTA manufacturers are once again facing losses. Ethylene glycol is in a state of overall loss, with the theoretical loss of the naphtha integrated unit reaching a record high of US$170/ton.

It is understood that PTA processing fees dropped sharply after the Spring Festival. The main reason was that during the Spring Festival, the PTA equipment was operating normally and downstream polyester was undergoing seasonal maintenance. As a result, the market had abundant spot stocks and prices were under pressure after PTA accumulated seasonal inventory.

According to industry insiders, after entering 2019, as the refining and chemical integration unit was put into operation, the growth of polyester slowed down due to the epidemic, and PTA inventory increased significantly. PTA manufacturers once again faced the dilemma of overcapacity, and high processing fees increased with It fell as new production capacity came online. This is a phenomenon in which the PTA industry chain enters a situation of oversupply and the market clears excess production capacity by compressing profits. At present, PTA processing fees continue to be at a low level. On the one hand, the industry is in a period of capacity expansion and supply growth is obvious; on the other hand, new production capacity is mostly supporting the upstream and downstream of the polyester industry chain, which has the advantage of industrial chain integration. In addition, the new capacity represents state-of-the-art production technology and production costs are also reduced. The low processing fees in the past two years are the result of the rapid development of the industry and are related to a variety of factors.

Weak production and sales suppress the enthusiasm of polyester factories to purchase raw materials.

As a result, the downward transfer of PTA inventory is slow.

Judging from the current polyester market, during the seasonal maintenance period before and after the Spring Festival this year, polyester factories did not experience large-scale load reductions, and the overall operating rate was higher than the same period in previous years. However, terminal weaving went on holiday as scheduled, leaving polyester factories with post-holiday inventory The pressure is higher than in previous years. In the week of February 10, the weekly operating rate of domestic polyester chips was 85.36%, an increase of 13.13 percentage points from the previous week and an increase of 7.13 percentage points from the same period in 2021; the weekly operating rates of polyester staple fiber and filament were 69.18% and 69.18% respectively. 80.66%, a decrease of 1.4 percentage points and an increase of 3.09 percentage points respectively from the previous week, and a decrease of 11.78 percentage points and an increase of 11.62 percentage points respectively compared with the same period in 2021.

At present, terminal orders are generally average. Due to the sharp increase in raw material prices, downstream companies are cautious about pursuing higher prices for polyester yarns. Therefore, after the Spring Festival, the production and sales of polyester yarns and staple fibers continue to be weak, and only a small amount of replenishment is mainly needed. With the textile market fully resuming production and work after the Spring Festival, the key node of construction and procurement will soon come after late February. On February 15, 2022, Suzhou City issued an epidemic prevention and control notice. Some communities in Shengze Town in Wujiang District, Guoxiang Street in Wuzhong District, Mudu Town, Gusu District, and Suzhou Industrial Park were adjusted to medium-risk areas. Among them, Shengze Town, known as the famous “Hometown of Silk”, is the main production base, export base and product distribution center of my country’s silk textile industry.

If low processing fees are maintained until March

Active maintenance of the device will also occur

The impact of the epidemic on downstream construction is still difficult to assess. Due to the impact of the Russia-Ukraine crisis, the trend of crude oil has also been confused. It is recommended to wait and see for the time being. Currently, according to the device dynamics, mainstream suppliers have announced maintenance plans for March to April, and the follow-up will depend on the actual implementation of maintenance at the factory. According to industry insiders, if the low processing fees this year are maintained until March, active equipment maintenance will still occur!


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Author: clsrich

 
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