In the second half of the year, maintenance of domestic PTA equipment increased, and the operating rate dropped significantly. In late July, the port closure caused by Typhoon “Fireworks” further aggravated the tight supply situation of PTA spot supply in the East China market. PTA futures prices were relatively strong, with the main contract reaching a maximum of 5,500 yuan/ton. As the impact of typhoon weather weakens and some preliminary maintenance equipment is restarted, the tight supply of PTA goods has been alleviated to a certain extent. Recently, downstream polyester factories have been affected by factors such as weakening terminal orders and deteriorating profit levels. Plans to reduce production and stop production have increased, and demand for PTA has weakened. International oil prices have fallen for seven consecutive trading days, further suppressing PTA futures prices. In the later period, PTA production capacity has entered a gap period, and there are strong maintenance expectations for some large-scale devices, and PTA supply pressure has weakened. However, there is still great uncertainty on the demand and cost side of PTA.
A Short-term international crude oil prices fluctuate widely
According to the latest monthly reports of the three major institutions, affected by the mutated new coronavirus epidemic, global crude oil demand may rebound in the future. There will be certain obstacles: EIA and OPEC kept their forecasts for world crude oil demand growth in 2021 and 2022 unchanged in their monthly reports, but OPEC lowered global demand for OPEC crude oil in 2021 by 200,000 barrels per day to 27.4 million barrels per day. It has lowered its forecast for OPEC crude oil demand in 2022 by 1.1 million barrels per day; the International Energy Agency (IEA) is more cautious, announcing in its monthly report that it has lowered its forecast for crude oil demand growth in the second half of 2021 by 550,000 barrels per day. 5.3 million barrels per day, crude oil demand is expected to increase by 3.2 million barrels per day in 2022, and a supply glut is expected to occur in 2022.
Although OPEC, led by Saudi Arabia, remains cautious about future plans to increase crude oil production, the increasingly severe Delta and other mutant coronavirus epidemics have increased market concerns about crude oil demand. Affected by the uncertainty of the epidemic, we expect that short-term international oil prices will mainly oscillate in a wide range.
The actual increase in B PTA’s effective production capacity is limited
According to the PTA new device commissioning plan announced at the beginning of the year, there will be 6 domestic devices this year with a total capacity of 16 million tons/year The production capacity is put into operation, and if all devices are put into operation as scheduled, the total domestic PTA device production capacity will reach 72.955 million tons/year by the end of the year, an increase of 28.09% compared with 2020, and an increase of 10.79 percentage points compared with 2020.
Entering the second half of the year, the launch process of new PTA devices has changed. The commissioning time of Hengli Petrochemical’s two sets of 5 million tons/year production capacity units initially planned to be launched at the end of the year has been postponed to the first half of 2022. The initial plan The start-up time of the second 3.3 million tons/year production capacity device of Yisheng New Materials, which was launched in the second quarter, has also been postponed to the end of the year. Considering that the first 3.3 million tons/year unit of Yisheng New Materials has been unstable after being put into operation, there is a possibility of further delay in the start-up time of its second unit. This year’s domestic PTA production capacity expansion has actually “ended”. The final annual production capacity of the new device was 8.2 million tons, only 51.25% of the plan at the beginning of the year. As of early August, the effective annual domestic PTA production capacity was 64.505 million tons, an increase of 13.26% from the end of last year.
In addition to the fact that the actual scale of equipment production is lower than expected at the beginning of the year, the long-term shutdown or even permanent shutdown of some old equipment has also better hedged against the pressure of increased supply brought about by the commissioning of new equipment. In recent years, the process technology used in newly put into production PTA equipment is more advanced, and the single set production capacity is higher. Compared with the old equipment in terms of fixed costs such as the amount of auxiliary materials and labor costs, it has greater advantages. Therefore, in many large-scale plants using new processes, After the device was put into operation, the market competition pressure faced by the old device increased significantly. According to statistics, as of the end of July, the annual production capacity of domestic equipment that is in long-term parking status or maintenance but has no clear restart time has reached 7.58 million tons, of which the annual production capacity of parking equipment this year has reached 4.79 million tons. Considering that the first set of 3.3 million tons/year production capacity of Yisheng New Materials was not stable after being put into operation, if this device is excluded from the effective production capacity of PTA, the newly increased production capacity of the shut down equipment this year will be almost equal to the production capacity of the newly put into production equipment. Quite frankly, the actual increase in effective production capacity of domestic PTA is very limited.
In August 2021, there are few maintenance plans for domestic PTA devices. However, because the restart of Yisheng New Materials’ 3.3 million tons/year production capacity device is not smooth and is still in a debugging state, the start-up of domestic PTA devices is still at 75%. Below low. As of August 20, the daily operating rate of domestic PTA devices was 78.38%, a decrease of 9.47 percentage points compared with the same period in 2020; based on this estimate, the daily domestic PTA output is approximately 140,400 tons, an increase of 6,800 tons compared with the same period in 2020.
Generally speaking, PTA equipment needs to undergo annual maintenance within a year. If the maintenance interval is too long, the probability of failure during operation of the equipment will increase. According to statistics, there are currently 4 large-scale installations in China with a total capacity of 9.15 million tons/year that have been operating continuously for more than 12 months. Due to the stability of the operation of the equipment, there is a high probability that these 4 installations will complete an overhaul within the year, and consideration will be given to Problems such as maintenance labor and insulation during cold weather in winter may lead to a significant increase in maintenance costs. Therefore, equipment located in the north has a higher probability of completing maintenance between September and October. Assuming that the device maintenance time is about 2 weeks, domestic PTA production will lose approximately 355,800 tons in the later period, and the pressure on the PTA supply end will be eased.
C polyester plant construction is facing downward pressure
In the context of global economic recovery in the “post-epidemic” era, the rebound in end market demand has pushed up The polyester industry is booming in 2021. The start-up of polyester plants has remained at a high level near 90% for a long time since March, and PTA demand has also received strong support. After entering summer, although winter orders are ahead of schedule,The turbulence has caused the polyester market to show a “low season but not a weak season” state. However, the recent severe global epidemic situation has weakened terminal weaving orders. After the negative feedback is transmitted upward, the start-up of polyester equipment is facing downward pressure. As of August 18, the daily operating rate of polyester factories was 83.07%, 6.4 percentage points lower than the previous high, and 4.64 percentage points lower than the same period in 2020; the daily operating rate of Jiangsu and Zhejiang looms was 74.92%, lower than the previous high A decrease of 4.71 percentage points, an increase of 11.62 percentage points compared with the same period in 2020.
In the second half of the year, the transmission of rising raw material costs for various polyester varieties became increasingly difficult, and profit levels continued to be compressed. In the second half of July, the book processing profits of polyester staple fiber suffered losses, and the book processing profits of polyester filament FDY began to enter a loss-making state in late July. Even the book profits of polyester filament POY and DTY, which performed slightly better, continued to show compression. state. Continuously increasing profit pressure has forced polyester factories to gradually roll out production reduction and suspension plans. On August 12, it was reported that four large polyester factories planned to reduce production by 20% starting from the week of August 16, which indicates that the start-up of polyester units will further decline. With the continuous decline in raw material prices, the profits of various polyester varieties have improved slightly in the past week. As of August 19, the book processing profits of polyester bottle flakes were 139.16 yuan/ton, the book processing profits of polyester staple fiber were 34.15 yuan/ton, and the book processing profits of polyester filament POY, FDY, and DTY were 539.16 yuan/ton and 214.16 yuan/ton respectively. Yuan/ton, 739.15 Yuan/ton.
In the short term, as the global epidemic situation is still severe, terminal market demand is difficult to significantly improve, and whether winter orders can be restored in the later period faces greater uncertainty. Under the dual pressure of weakening terminal demand and continued compression of polyester processing profits or even losses, the reduction and suspension of production of polyester equipment may further increase, and the demand for PTA will also decline.
D PTA spot market supply continues to be tight
PTA social inventory hit a record high in early March, and with the increase in maintenance of PTA equipment, PTA social inventory increased rapidly dropped and remained at around 3.2 million tons. Starting from July, PTA equipment entered a new round of maintenance peak, PTA output decreased, and PTA social inventory began to decline continuously again; by the beginning of August, PTA social inventory dropped to 2.8681 million tons, the first time since April last year that it fell below 3 million tons. . At the same time, PTA warehouse receipt inventory has also continued to decline. Nearly 400,000 tons have been destocked since July, and the inventory has dropped to the lowest level since the same period in 2015. On August 20, PTA social inventory was 2.7746 million tons, a significant decrease of 1.5739 million tons from the high point of the year, and a significant decrease of 1.1174 million tons from the same period in 2020; PTA warehouse receipt inventory was 350,300 tons, a significant decrease of 1.6322 million tons from the high point of the year. tons, a decrease of 394,800 tons compared with the same period in 2020.
The decline in PTA inventory, especially the recent rapid decline in warehouse receipt inventory, indicates that the PTA spot supply in some areas has been tight recently. Since March, the two major domestic suppliers have announced reductions in the supply of contract goods for six consecutive months. Downstream purchasers need to purchase more directly from the spot market, which has led to tight supply in the spot market in areas such as Zhapu, Jiaxing. In addition, nearly 30% of domestic PTA production capacity is currently located in the Northeast region. The recent typhoon weather and domestic epidemic prevention and control measures have hindered the supply of goods from the Northeast region from entering the East China market, further pushing up the supply shortage. As the domestic PTA supply may decline due to the maintenance of large-scale equipment, and most of the equipment to be inspected is located in the Northeast region, it is expected that the spot supply situation in the mainstream PTA market in East China will continue to be tight in the future, and PTA futures prices will also receive certain support.
E PTA processing gap expanded to the highest level during the year
After the PTA processing gap was compressed to less than 300 yuan/ton at the beginning of the year, the maintenance of domestic equipment increased and the concentration of equipment increased. Affected by various factors such as stable demand for ester terminals and tight spot supply in some areas, it has gradually expanded. Affected by Typhoon “Fireworks” at the end of July, Jiaxing Zhapu Port was closed to shipping, PTA spot prices rose rapidly, and PTA processing differences expanded significantly, reaching a peak of more than 850 yuan/ton, the highest since early June 2020. Recently, due to the weakening of the downstream polyester market, the demand for PTA has declined, and the PTA processing gap has narrowed to 600-650 yuan/ton, but the overall price is still at a high level in the past year. According to estimates, as of August 20, the PTA processing difference was 613.26 yuan/ton, which was 40.08 yuan/ton narrower than the same period in 2020; if the cost of the auxiliary acetic acid is taken into account, the PTA processing difference was 408.51 yuan/ton, which was 408.51 yuan/ton lower than the same period in 2020. During the same period, it narrowed by 161.53 yuan/ton.
Due to the recent weakening of terminal market orders and poor profits of various polyester varieties, the decline in demand for PTA has made it difficult to keep its processing difference at a high level. At the same time, the continued high processing difference may cause factories to postpone equipment maintenance. Originally, Some devices that have been in a long shutdown state may also be restarted. The renewed intensification of the contradiction between supply and demand will force the PTA processing gap to narrow. However, from the perspective of supply, the current expansion of new PTA production capacity has basically entered a “gap period”. Mainstream suppliers have continuously reduced contract supply, resulting in tight supply of PTA spot supplies in some areas of East China, and PTA processing differences will also receive certain support. Therefore, we expect that the PTA processing gap will narrow in the later period but the extent will be limited.
Overall, we are cautiously optimistic about the market outlook of PTA. From the supply side, PTA’s production capacity expansion is basically completed during the year; there are still 4 large-scale equipment in China that have not yet undergone annual maintenance. Considering that the probability of failure of the equipment increases after long-term operation, it will be a high probability event that these equipment will be shut down for maintenance in the future. This will further ease domestic PTA supply pressure in the second half of the year. From the demand side, due to the weakening of weaving orders, polyester manufacturers have begun to increase production reduction and shutdown efforts under the influence of negative feedback from terminal demand and profit pressure. In the short term, PTA demand will weaken. If the global epidemic situation fails to improve, , then the increase in PTA demand in the traditional peak season of “Golden September and Silver Ten” may be limited. In terms of operation, it is recommended to maintain a bullish approach and make flexible adjustments based on international oil price trends and changes in PTA’s own processing fees.
Affected by negative feedback and profit pressure, efforts to reduce production and shutdowns have begun to increase. In the short term, the demand for PTA has weakened. If the global epidemic situation fails to improve, the increase in PTA demand during the traditional peak season of “Golden September and Silver Ten” may be limited. In terms of operation, it is recommended to maintain a bullish approach and make flexible adjustments based on international oil price trends and changes in PTA’s own processing fees. </p
