The New Feng Ming And Hengli Device Bring Nearly 10% Of PTA Supply Increment, Polyester Raw Material Giving Way To "Overbearing President", Polyester Filament Will Become "Diamond Old Five"?

Traditionally, polyester raw materials occupy the most powerful position in polyester industry chain, but this phenomenon is changing quietly in the near future.

PTA: the new Feng Ming and Hengli devices bring nearly 10% of the PTA supply increment. The monthly output will increase by about 400 thousand tons.

According to statistics, 9-10 new month Feng Ming first phase 2 million 200 thousand tons and Hengli Petrochemical 2 million 500 thousand tons of equipment put into operation is expected, if these two sets of devices can produce smoothly, will bring our country nearly 10% of the PTA supply increment, if the load is full, every month will appear about 400 thousand tons of output growth.

PX: another 1 million ton plant has been added, which will increase 29-33 tons per month.

It is reported that the 1 million ton / year PX plant of Hainan refinery and expansion has been put into operation at the end of September and plans to produce products in September 30th, and the supply of domestic PX has increased further. As of September 2019, China's new PX production capacity includes Hengli Petrochemical 4 million 500 thousand tons / year, Hongrun 600 thousand tons / year, Liaoyang Petrochemical capacity expansion 300 thousand tons / year, Hainan refining and chemical two phase 1 million tons / year total 6 million 400 thousand tons / year, compared with the end of 2018, production capacity increased by 46%. If the Hainan refinery and Zhejiang petrochemical company has a normal operation of the 5 million ton / year PX plant in the 4 quarter, according to the estimated load of the two sets of 70%-80%, the domestic output of 29-33 tons / month PX will be increased.

Polyester raw material PX-PTA: before returning to the night before liberation, it has fallen below the position before the Saudi attack.

After the attack of Saudi oil refining unit in September 14th, crude oil products were driven by crude oil, and domestic chemical products generally came out of a rally. However, with the impact of the Saudi incident gradually fending off, the previously expected higher chemical products have been callback, of which the largest decline in PTA, has fallen below the location of the attack before Saudi Arabia. Since the new high of 5456 yuan / ton on 17 September, the price of the 2001 main contract of PTA futures has been decreasing, and the lowest price in September 30th is 5036 yuan / ton, the lowest since August 22nd.

　　 PX is also rising rapidly as a direct downstream product of crude oil. However, the logic of crude oil production was subsequently falsified by Saudi Arabia, and international oil prices were falling. PX prices, which lacked much support from fundamentals, were also hard to maintain.

The current PX-PTA link is highly processed, and the future is expected to gradually shift downstream.

Demand side, along with the arrival of the gold and silver ten in the spun apparel industry chain, the seasonality of demand side has become an important support for the PTA price since September. But in 2019, the peak season was more "temperate", and the risk aversion of all sectors of the industrial chain was aggravated. The raw materials used for polyester raw materials tended to adopt a relatively cautious attitude, which led to insufficient stimulation on raw materials demand. On the other hand, the downstream profits of the industrial chain continued to be weak, and the willingness of manufacturers to expand their operations was not strong. Procurement was mostly based on rigid demand, and it was difficult to further boost demand. At present, the polyester plant operating rate has gradually declined, with the upstream PTA capacity further increased, the supporting effect of downstream demand gradually weakened.

From the supply side, the core event is the 9-10 month new Feng Ming first phase 2 million 200 thousand tons and the Hengli Petrochemical 2 million 500 thousand ton plant's operation expectation. If these two sets of devices can produce smoothly, it will bring nearly 10% PTA supply increment to our country. If the load is full, the output of 400 thousand tons will increase every month, which will undoubtedly bring more pressure to the PTA supply and demand side.

　　 From the perspective of supply and demand of PX itself, after 7-8 months, the maintenance and repair of large units such as Hengli and Fuhua dropped down, and the supply and demand side had been alleviated. In September, the output of these units gradually returned, and at the same time, 800 thousand tons of Sinochem and 1 million 500 thousand tons of Brunei were gradually put into operation. It is expected that the supply side will increase substantially. On the other hand, due to the early PX's inventory and the relatively good processing profit of PTA, the market's enthusiasm for purchasing PX is relatively high, and the import side will also increase by a certain extent.

In addition, from the profit distribution of the industrial chain, the profit distribution of the polyester industry chain has been controlled in the PX-PTA interval for a long time since the large-scale refinery plant was put into operation in 2018. Higher economic efficiency has also brought about intensified industrial competition. After entering 2019, PX and PTA both entered a period of rapid growth in capacity. Upstream manufacturers gradually had difficulty in controlling pricing power, and profits in industrial chain began to shift downward. At present, the processing profit of PTA500 yuan / ton has approached the normal level, but the processing profit of PX500 USD / ton still has considerable compression space. As the pattern of PX oversupply continues, its price forecast still has a certain downward trend.

　　 After the gradual decline of the impact of the Saudi attack, the price of polyester raw materials has returned to the basic logic. There is a clear negative factor both in terms of supply and demand and upstream costs. It is expected that the price of polyester raw materials will continue to run weak in the four quarter. From the perspective of the distribution pattern of profit distribution in the industry chain, the current PX-PTA processing profit is too high.

Will the polyester filament be the "diamond king's fifth" in the industrial chain after the new round of production capacity is put into operation?

In the future, due to the increase in trade barriers and the entry of polyester raw materials into the new round of production capacity, the polyester industry will eventually show a diversified trend.

1, policy support, profit driven China open PX capacity expansion era, import dependence sharply decline. In 2019 Q4-2020, there was a total of 7 million tons of new capacity production plan of Zhejiang Petrochemical, Dongying Union, Hainan refining and Sinopec and Quanzhou in PX. With the improvement of domestic self-sufficiency rate, the dependence of PX imports will fall from 60% to less than 30% in the future.

2, PTA entered the peak production capacity and intensified competition in the industry. In 2019 Q4-2020, there was a total of 18 million 800 thousand tons of new capacity production plan of Hengli petrochemical, Ningbo Yisheng, new Feng Ming, Honggang petrochemical, Fujian Honghong and so on. The competition in the PTA industry will further intensify in the future, and once again enter the low processing fee range in the future, the profits of the industry will gradually shift to polyester. "PTA"

3, polyester industry concentration degree trend unchanged, differentiated fiber into a new battleground for industry competition. Although polyester exists in 2020, 5 million 950 thousand tons of polyester production capacity plan is put into operation. Due to the limitation of production technology, the production of polyester capacity in the past two years is still dominated by Tong Kun, new Feng Ming and Heng Yi. However, due to the weakening of competitive advantage of conventional products, differentiated fiber has become a new battleground for the competition of polyester industry.

4, the Sino US trade war has dragged down the terminal industry, accelerated the transfer of the terminal industry and the export of the spinning industry. The US tariffs on China involve nearly 41 billion dollars in textile and clothing industry, and the future trade barriers will become more serious. Moreover, due to the high labor cost in China, the terminal garment industry has shown a trend of transferring to Southeast Asia. With the escalation of Sino US trade war, the trend of southeast garment industry will be further accelerated. At the same time, due to the slow growth of polyester production capacity in Southeast Asia, this will exacerbate the export of the spinning industry.

At present, the polyester market structure, regional and stage surplus situation is still grim, and the state of downstream demand has not improved. The situation facing polyester factories is still unoptimistic, but for the sustainable development of polyester industry, we still have to experience the pain of "going to produce energy".