Summary
●In August, OPEC+ began to increase production and crude oil prices weakened. PTA cost-end price support has weakened, the operating rate of downstream polyester factories has also dropped significantly, and polyester prices have generally fallen. In August, the PX load rate gradually increased, PTA maintenance equipment was restarted, new production capacity was gradually reached capacity, the terminal polyester industry increased production reductions, the fundamental supply and demand margin weakened, PTA destocking is expected to decrease, and the pressure on warehouse storage increased in the fourth quarter. Therefore, PTA processing fees are expected to fall back to a high level.
01 Crude oil prices fell in stages
In August, the global epidemic has become severe again recently, which has a negative impact on the economy and The drag on crude oil demand prospects is starting to show. In August, OPEC+ began to increase production by up to 400,000 barrels per day per month. Recently, the three major energy agencies have also released reports one after another. The IEA has lowered its forecast for global oil demand growth this year, while the EIA and OPEC have temporarily remained unchanged. At the same time, the IEA said it expects a crude oil supply surplus in 2022.
In July, domestic PTAs added Luoyang Petrochemical, Dushan Energy, Ningbo Taihua, Yadong Petrochemical, and Ningbo Yi The cumulative maintenance and production reduction enterprises such as Shengcheng and Honggang Petrochemical totaled 21.105 million tons. The maintenance and production reduction capacity increased by 5.625 million tons from the previous month. The theoretical loss of maintenance and production reduction was 1.115 million, an increase of 188,300 tons from the previous month. Therefore, the PTA production capacity operation rate was not high in July, which caused PTA to continue to be destocked. The typhoon weather affected PTA logistics and helped PTA prices to rise. The low PTA futures warehouse receipts and effective forecast stocks in July were 500,000 tons, a decrease of about 240,000 tons from the previous month.
At present, the third batch of domestic crude oil quotas has been issued, and the tight situation of Zhejiang Petrochemical’s raw materials is expected to ease. The PX load rate will increase in the later period. Both PX and PTA processing fees are relatively high, and short-term cost-end support weakens. , processing fees are expected to fall back. In August, PTA maintenance equipment was restarted, the end-use polyester industry’s production cuts increased, and the fundamental supply and demand margins weakened. The extent of PTA destocking is expected to decrease, and the pressure on warehouse storage increased in the fourth quarter.
02 PTA processing fees are expected to decline
2021 will still be a big cycle for PTA production capacity. Starting from July, the 3.6 million tons/year PTA device of Yisheng New Materials has been included in the production capacity base. The PTA industry production capacity is currently 66.23 million tons/year. In July, due to the impact of typhoons and port closures, PTA’s spot liquidity tightened, and the processing fee rose sharply to around 800 yuan, returning to the average higher level in previous years. In August, refinery quotas were temporarily resolved, the PX-NAP price gap slowly fell back to US$277/ton, and PX prices consolidated within a narrow range.
At present, in terms of industrial processing fees, the naphtha price difference remains strong at 140 US dollars, and the PX processing difference is around 250 US dollars. The processing difference of PTA is about 700 yuan/ton. Judging from the historical average level, it is more reasonable to maintain the PTA processing fee around 500 yuan, which is currently on the high side, and will also attract the participation of short-selling hedging to a certain extent. At the same time, crude oil prices may fluctuate widely in the second half of the year, and cost-side support and news interference will gradually weaken.
In terms of PTA supply, some PTA units will restart in mid-to-late August, and supply pressure will increase. In terms of new equipment, new materials are unstable in operation. They are currently operating at 30% capacity and are expected to operate at 60% load in September. Regarding restarting equipment, a 1.2 million-ton unit in Sanfangxiang and Taiwan Chemical have recently restarted, and other equipment has not changed much. As cost-side support weakens and new equipment reaches capacity one after another, PTA futures prices have experienced a sharp correction, and high processing fees may be difficult to maintain.
03 Downstream construction starts decreased and demand weakened
8 In terms of polyester operating rate in March, it was reported that major polyester manufacturers planned to jointly reduce production, and polyester promotion downstream purchases increased. The joint production reduction of the four major polyester factories has a designed production capacity of 20 million tons, a reduction of about 20%, and an impact on the operating rate of about 5%. The operating rate is expected to be reduced to 87% in August. In terms of orders, new weaving orders are weak, finished product shipments are not smooth, finished product inventory continues to be high, and the market is not optimistic about future expectations. Due to the weakening of orders and the logistics impact caused by the epidemic, downstream rigid-need procurement is the main focus, and production and sales are relatively weak.
In August, due to the poor performance of new terminal orders and tight cash flow at the weaving end, the operating rates of downstream weaving and dyeing plants continued to fall. Recently, the startup rate of elasticizing is 94%, the loom startup rate is 75%, the polyester yarn startup rate is 71%, and the dyeing factory startup rate is maintained at 75%. Texturing is still profitable, but the machine can be kept running while the looms and dyeing plants are actively reducing their load due to profit and inventory pressure.
Textile and apparel are expected to maintain a moderate recovery in the second half of the year. Domestic expectations for textile and clothing in the third and fourth quarters Clothing consumption is expected to be relatively optimistic, with the full-year growth rate expected to be around 11% in total, and the month-on-month demand growth rate in the second half of the year expected to be around 7%-8%. For textile and apparel exports, it is still expected to benefit from improved overseas demand, with exports expected to increase by around 17% month-on-month.
At present, the polyester industry is gradually entering the traditional peak demand season of the Golden Nine and Silver Ten, and the operating load may remain around 90%. The current overall profit of polyester is still below the profit and loss line, although the profit of filament has�Repaired, but short fiber is still in a loss state. Cash flow continues to suffer losses, and some factories have increased maintenance plans or postponed restarts. The pressure on the supply and demand side of short fiber is not great before the fourth quarter, and there is motivation for profit expansion under the stimulation of demand.
Conclusion: Overall, PTA cost-end price support changes The operating rate of downstream polyester factories also declined, and polyester prices generally fell. In August, PX load factor gradually increased, and cost-side support weakened. PTA’s new production capacity has gradually reached capacity, the fundamental supply and demand margin has weakened, the extent of destocking is expected to decrease, and the pressure on warehouse storage will increase in the fourth quarter. Therefore, PTA processing fees are expected to fall back to a high level.
Risk disclosure:
1. Overseas epidemics once again disrupt the pace of global recovery
; 2. International crude oil prices fluctuate violently;
3. The start-up of downstream polyester factory equipment has fluctuated significantly.
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