PTA: Reduce Production And Push Up Prices

Beginning in the early November, the market began rumors that the PTA alliance once again reached a reduction agreement, which was confirmed in the middle of the month.

The specific content is, Yisheng plan to stop Dalian 1#220 million tons of equipment, Ningbo 3#200 million tons of equipment, Hainan's installation is tentatively fixed; Hengli petrochemical 1#220 million tons stop half a month or so; in addition, Tung Kun, Sheng Hong, the Far East and other appropriate drop of about 20%; Xianglu petrochemical or stop 1#165 ten thousand tons installed.

As of November 24th, the parking plan announced by Hengli and Yisheng is consistent with that. If the plan is fully implemented, the load of PTA in the first half of December will be about 57%, and the average monthly load estimate will be around 65%.

PX demand decreases, prices fall easily.

According to 65% load, PTA needs about 1 million 580 thousand tons of para xylene (PX) in December, and the domestic estimated output is 800 thousand tons, which needs to import about 780 thousand tons.

Thanks to the successful launch of PX's new capacity this year, the supply of PX in Asia increased significantly. In September, China imported over 1 million tons.

From the recent load and maintenance plan of other Asian countries, the supply of PX in Asia is still abundant in December, and its profit is hard to rise significantly.

The main raw material of PX is naphtha.

At present, European ARA and Japanese naphtha inventories are new in recent years. Korean naphtha stock is also the new high in the same period. Naphtha price has been affected by the low crude oil and high inventory, and has been languished.

Low demand and low cost will make PX price fall easily in December.

Without cost support, PTA production is also difficult to push up prices.

As of November 25th, the dynamic production cost of PTA was 5780 yuan, which was only 80 yuan higher than the spot price of PTA, which was basically the same as the price of PTA1501 contract settlement. The price of PTA basic flat water has reflected most of the expected reduction in production.

If the target of reducing production is to turn PTA into production, but after PTA profits, the PTA enterprises who do not participate in the alliance will be better. This makes the rise of PTA still needs PX support.

For example, in May of this year, PTA cut production and PX increased by 300 US dollars. At that time, the new PTA plant was put into operation at the time, and the new PX installation was stable until September, which is obviously different from the current supply and demand situation.

Therefore, under the drag of PX, PTA has little room to go up.

It is expected that domestic PTA will be available by the end of November.

In 1 million 500 thousand tons, polyester enterprises can be supplied for 20 days or so. The inventory is at a medium high level. According to PTA and polyester load, 65% and 80% are calculated respectively. The inventory of PTA still has more than 1 million 300 thousand tons by the end of the year, and it is also difficult to boost PTA price.

Polyester is still in good condition, and profits are falling down on PTA.

Since the beginning of the fourth quarter, the situation of polyester enterprises has improved significantly, profits have reached a new high in the year, production and sales have been greatly improved, and inventories have reached a new low in recent years.

So far, polyester products have only POY profits to maintain high levels in recent years, and the rest of the products are near breakeven.

Obviously, the price of raw materials will continue to rise, which will lead to the loss of most polyester products, which is not conducive to maintaining the high load of polyester enterprises. If the load of polyester enterprises falls below 75%, the supply and demand will basically balance with the PTA load of 65%.

In addition, in November, the PTA production alliance's closing price was 5950 yuan / ton, non union 5875 yuan / ton, excluding freight interest and so on, polyester enterprises took the cost of goods to be reduced by 200-250 yuan.

The cost of the registered warehouse receipt to the contract delivery in January is less than 180 yuan. When the 1501 contract is more than 5900 yuan, the polyester enterprise has already made profits. If the price continues to rise, while the production loss is on the one hand, the profit of the insurance company will be huge, so the choice of the enterprise is self-evident.

Overall,

The reduction is expected to have been reflected in the current spread. PX and pet are slightly profitable in the industrial chain, while PTA has suffered a slight loss.

At present, PX has no foundation to rise.

The high price of PTA is suppressed. PTA's profit reduction is not conducive to the alliance. It is estimated that the price of PTA will increase in December, and the price of the 1501 phase will be 6000 yuan. The lower pressure will have to wait for further guidance on the cost and downstream consumption.