PTA: The impact of raw material trends is weakened, and the market outlook will maintain a range of oscillation pattern
The implementation of the domestic equipment maintenance plan in May was not as good as expected, and the continued decline in supply did not appear. Although the international oil price trend was relatively warm, the PTA price showed a trend of oscillating operation. In the short term, due to the widening of processing gaps to the highest level during the year, the impact of raw material price trends on PTA is weakened. It is expected that PTA will maintain a range-bound pattern in the future.
The overhaul of the device is not as good as expected
According to the plan at the end of April, although the scale of domestic PTA equipment maintenance in May was less than April, there are still 5 sets of equipment with a total capacity of 6.4 million tons/year. As the PTA processing gap has expanded since May, the willingness of companies to take the initiative to stop production for maintenance has declined. Although at the end of May, a set of equipment of Yisheng suffered accidental overhaul for some reason, the overall scale of overhaul of domestic PTA equipment was smaller than expected at the beginning of the month.
The PTA processing gap continued to expand in June, reaching 700 yuan/ton at one time, a new high since the beginning of September 2020. Affected by this, the overhaul plans including Hengli Petrochemical Line 5 and Honggang Petrochemical have been postponed again, and the actual overhaul scale in June has further decreased.
With the resumption of production of pre-overhaul devices, the supply of PTA will increase significantly. As of June 8, the domestic PTA plant's daily operating rate was 79.82%, and the daily output was 135,300 tons, an increase of 16,700 tons over the same period in 2020. According to estimates based on the existing maintenance plan, by mid-June, the operating rate of PTA devices will increase to 86.69%, with a daily output of approximately 146,900 tons, an increase of 22,200 tons over the same period in 2020.
Positive start of polyester plant is suppressed
Beginning in May, the performance of terminal market orders was significantly weaker than expected, and the operating rate of looms dropped from over 80% to 70%. After the negative feedback from the terminal continues to be transmitted upwards, the inventory of various polyester varieties has risen to a relatively high level in recent years, and the operating rate in the later period will face greater downward pressure.
In addition, the continuous increase in the price of raw materials in the early stage has squeezed the processing profits of various polyester varieties. According to estimates, with the exception of polyester chips, the processing profits of all other varieties have been compressed to the break-even line, which has increased the willingness of polyester plants to actively reduce production and overhaul, and further increase the downward pressure on the operating rate of polyester plants. As of June 8, the daily operating rate of Jiangsu and Zhejiang looms was 73.15%, an increase of 6.15 percentage points from the same period in 2020, but a decrease of 13.13 percentage points from the previous high; the daily operating rate of polyester factories was 88.99%, compared with 2020. An increase of 3.18 percentage points over the same period, but a drop of 2.99 percentage points from the previous high.
PTA processing difference is obviously enlarged
Due to the maintenance of multiple sets of domestic PTA devices from April to May, the demand for PX declined month-on-month. However, due to the increase in domestic PX imports, the PX market has been in a state of accumulation. Affected by this, although international oil prices are operating at a relatively high level, the PX price has declined to a certain extent. In the case of PTA price fluctuations, the PTA processing gap has significantly expanded.
In addition, the exchange rate of the U.S. dollar to the RMB dropped to 6.4 from 6.4672 at the end of April. The continued appreciation of the RMB has further reduced the price of raw materials after they have been converted into RMB, and the PTA processing gap has also expanded. In an environment of expansion of production capacity and increased competition, the expansion of poor processing means that the impact of raw material prices on PTA is weakened. As of June 8, the PTA processing fee (excluding acetic acid) was 514.84 yuan/ton, a decrease of 190.83 yuan/ton from the same period in 2020; after adding the cost of acetic acid, the PTA processing fee was 240.09 yuan/ton, a decrease of 392.43 compared to the same period in 2020. Yuan / ton.
To sum up
Due to the expansion of the processing difference, the overhaul of multiple PTA devices has been delayed. With the restart of the previous overhaul devices, the supply of PTA has increased, and the contradiction between PTA supply and demand may intensify when the demand side faces greater downward pressure. In addition, the expansion of domestic production capacity, intensified market competition, and the expansion of processing gaps mean that the impact of raw material prices on PTA has weakened. Comprehensive analysis shows that PTA will maintain an oscillating market in the short term.
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