Prospect of Global Polyester Industry Chain

Since 2015, the raw material price, finished product price and performance of polyesterindustry have reached new highs. Based on the basic analysis, this paper mainly discusses the current situation of the whole polyester market and its causes. Overview of polyester Market in recent years.

Regardless of the world or China's polyester situation, the market forecast from 2016 to 2018 is inconsistent with market changes, that is, excessive pessimism or insufficient optimism. From June to early September 2018, the actual output of polyester changed greatly, and it could break through 50 million tons and reach a new high. Of the 50 million tons of polyester, two-thirds of its raw materials are PTA and one-third are ethylene glycol.

PTA used to be surplus product. From 2014 to 2016, most people believe that PTA supply exceeds demand is the reason for polyester enterprises to lose money, and it is difficult to improve in the short term. However, polyester enterprises have not predicted the high growth rate of production from 2016 to 2018. As a major supplier of raw materials, almost all PTA companies have never forecasted a more stable demand even though they have done business in the past two years. In 2016 and 2017, even though PTA demand is relatively strong, there are still some profits in the price gap between raw materials and prices.

According to experience, polyester enterprises can also misjudge the supply and demand situation of PTA market, such as PTA output can not meet downstream demand. So supply exceeds demand is only theoretical. In fact, long-term idle PTA capacity can not meet downstream demand. In addition, polyester enterprises of PTA origin in Taiwan, Korea and Thailand in China voluntarily reduce their load or long-term stagnation of uncompetitive PTA devices because of PTA production losses. After the occurrence, many PTA end users, such as polyester, paint and TVT factories, tried to persuade long-standing idle PTA manufacturers to restart production equipment for import. Although some factories have put it into practice and the import volume of PTA in China has increased, there is still a big gap with the situation of millions of tons per month in the past.

PTA shortage can also be attributed to the shortage of raw material PX. From the supply side, at many large international petrochemical conferences in recent two years, many PX producers in the polyester field believe that China's import demand for PX will shrink dramatically in 2018. The main reason is that China, Saudi Arabia and Vietnam will be put into operation one after another, which indicates that the supply of PX will exceed the demand. Because PTA has been depressed for many years, it is very difficult for PX to maintain a certain price difference when it increases production, that is, it is difficult to maintain profits.

From April to June this year, PX spot prices fell sharply, so most people believe that PTA prices will also fall sharply after April and May, and then short the PTA futures contracts from June to August, but today, according to market conditions, we can see that this operation is a failure. Most investors are trying to remedy the situation, which has led to a sharp rise in prices. It is difficult to predict whether PX will be in surplus this year or next. If it develops as expected, PX devices in China and Saudi Arabia will be put into operation by the end of 2019. But because most people are overly pessimistic, China's double-digit polyester growth rate, which has lasted for many years, will be unsustainable.

However, except for 2013-2015, China has maintained double-digit growth since 2003-2005. In other words, in the short run, China's polyester industry can not compare with other countries before. It can maintain a high growth rate for more than 10 to 20 years, after all, because China itself has a huge market.

In the next five to seven years, the mode of exporting large quantities of Chinese-made polyester products to other countries will not change, and even there will be greater domestic demand. If pessimism is abandoned, the new production of millions of tons of PX may ease the current tension. As for whether there is surplus, we need to consider the growth of PTA production, polyester production and actual demand. Market situation analysis of ethylene glycol.

Ethylene glycol is another important raw material of polyester, and its market situation is mainly based on the logic of oversupply. Most people believe that from the second half of 2019, the world's supply and demand balance will be basically broken, leading to a sharp decline in ethylene glycol load.

Firstly, the situation can be attributed to coal-based ethylene glycol. Up to now, only China has coal to produce ethylene glycol, and its production capacity is also increasing rapidly. In fact, the production capacity of coal-based ethylene glycol has indeed increased. Individual units can provide steady monthly supply to downstream customers, but the actual production growth rate is not fast. In the past, some polyester factories boycotted coal to produce ethylene glycol, but in terms of indicators, all polyester products can use coal to produce ethylene glycol. In addition to other logistics or supply problems, coal-based ethylene glycol has basically reached a mature status. However, it is still difficult for coal-based ethylene glycol to replace mainstream ethylene glycol in the coming years.

Compared with coal-based ethylene glycol or exogenous ethylene glycol, the cost of ethylene glycol produced by shale gas in the United States is relatively low, but if it is produced in large quantities, there may be a situation of oversupply. For many Asian countries, there will be more new ethylene glycol production capacity between 2020 and 2022, originating from existing and just mentioned aromatic hydrocarbon plants. These new capacities are likely to lead to price differentials for ethylene glycol, especially to reduce the implicit price differentials. However, there will be no serious surplus of ethylene glycol in the short term. The reason is that some ethylene glycol producers will withdraw from this market in 2022 and 2023, and other competitive ethylene glycol producers will replace them.