PTA price is expected to be weak before Spring Festival holiday

With OPEC + expanding the scale of production reduction, the international oil price remained strong in December, PTA period price also continued to rise, and the main contract rose to 4994 CNY/ton on December 17. After that, under the background of the expectation of the new unit put into operation and the expansion of polyester production reduction and shutdown scope, the PTA price dropped. According to the original plan, the 1.2 million T / a unit of Sinopec and 2.5 million T / a unit of Hengli Petrochemical line 4 were put into operation in December. However, at present, the operation time of the two units has been delayed, and the market's worry about the increase of supply has been weakened. In terms of unit maintenance, in late December, 1.2 million T / a unit of hailun Petrochemical Co., Ltd. is planned to be overhauled, and 2.25 million T / a unit of yishanhua line 1 is planned to be overhauled from the end of December to the middle of January next year. From the perspective of time and scale, the overhaul units of Hellenization and yishanhua are basically one-to-one corresponding to the units planned to be put into operation, and the supply increment brought by the new unit's putting into operation will be offset by the unit overhaul. As of December 24, the daily operating rate of domestic PTA plant is 93.47%, and PTA supply will remain stable in the short term. With the end of winter orders, the downstream polyester industry has gradually entered the off-season of demand, and the deterioration of production profits has forced polyester enterprises to reduce production and stop production since late November; in December, the scope of polyester enterprises to reduce production and stop production has continued to expand.

As of December 20, the production capacity of domestic polyester plant is 4.7 million tons / year. Polyester varieties began to decline. As of the week of December 19, the weekly operation rate of domestic polyester chip is 87.52%, up 23.88% compared with the same period of 2018; the weekly operation rate of polyester staple fiber is 79.54%, down 0.86% compared with the same period of 2018; the weekly operation rate of polyester filament is 75%, down 4% compared with the same period of 2018. At present, the production reduction and shutdown scope of polyester plant will continue to expand. According to the existing plan, there will be 6.66 million tons / year plant shutdown arrangements in the later stage, and the capacity of the plant that can be resumed before the Spring Festival holiday is 1.31 million tons / year. On the whole, after the removal of the re production unit, the total production capacity of polyester production before the Spring Festival holiday is 9.35 million tons / year, accounting for 16.06% of the total production capacity at the end of 2019. With the expansion of production reduction and shutdown scope, the start-up of various polyester varieties will further decline, and the demand for raw materials PTA will also weaken. With the decrease of PTA plant maintenance and the expansion of polyester plant shutdown, PTA has ended the two-month inventory situation since the National Day holiday, and social inventory began to accumulate again. As of December 20, China's PTA social inventory was 1278000 tons, an increase of 11000 tons on a month on month basis, 580000 tons higher than the same period in 2018, and the inventory volume is still at a high level in the past two years. To sum up, although the start-up time of the units of Zhongtai petrochemical and Hengli Petrochemical line 4 is delayed, and the maintenance of the units of hailun petrochemical and yishanhua will to some extent offset the supply increment brought by the start-up of the new units, there are still a large number of production reduction plans for the downstream polyester units before the Spring Festival holiday, the start-up of various polyester varieties will be further reduced, and the demand for raw material PTA will be weaker. Under the condition of stable supply and weak demand, PTA social inventory will enter the accumulation mode again, and the later inventory will further increase.