Strong Cost Support After PTA Spring Festival Will Not Fall Significantly

Cost support is strong

Due to the upturn of the whole industrial chain, the average operating rate of PTA plants in 2018 increased by nearly 6% compared with that in 2017, and the increase in demand drove up the PX price. The average processing fee of PX still stands at $542 / ton in the context of drastic fluctuations of the whole industrial chain in the second half of 2018. Since January 2019, with the strong recovery of the international oil price, the price of PX in Asia returned to above $1,000 / ton. The price difference between PX and naphtha widened by $103 / ton since the beginning of the month, and the profit reached $286 / ton. In terms of installation, the 800,000-ton PX plant of fuhai chuang has been put into operation at the end of 2018, and the remaining 800,000-ton capacity will be released after the Spring Festival this year. In addition, a total of 12.6 million tons of new PX production capacity is planned for 2019, most of which will be integrated units. However, these capacities will not be available until the second half of this year, and the short-term PX price is expected to remain high.

PTA supply pressure is low

After the launch of the PX plant in fuhai, its supporting PTA capacity of 4.5 million tons was originally planned to increase from the current 2.25 million tons to 80% by the end of January, reaching 3.6 million tons. However, a recent glitch in its PX plant delayed the restart of the PTA plant until mid-to-late February. In terms of new production capacity, in the first half of this year, only 1 million tons of sichuan shengda plant is scheduled to be released. Although pengwei petrochemical and yisheng petrochemical plants have been restarted recently, reibin petrochemical plant with 1.4 million tons will start one-month maintenance, which will offset the negative impact of part of the increased production capacity. At present, the PTA inventory is basically at a low level of 3-4 days. Even after the accumulation of stocks during the Spring Festival, the overall supply pressure in the market is still small.

Polyester inventories are low

Since this year, apart from filament POY floating up and down the cost line, other varieties all have good profit margins. Under the background of relatively abundant funds, the overhaul time of polyester plant has been delayed, which contributed to the rebound of PTA market. From the point of the industrial chain, the future market after the Spring Festival is the biggest hidden trouble of polyester markets have tired library, however, as the polyester production and marketing, polyester silk inventory high retreat sharply since the second half of 2017, just two months of polyester filament in xiamen respectively, and the DTY polyester FDY such inventory down to 3 days, 4 and 8 days, half of the inventory levels for the same period last year. From this point of view, even if the later polyester plant accumulates inventory, the current low inventory level will prolong the accumulator cycle, thus weakening the negative impact of the increase in polyester inventory after the Spring Festival.

In short, the strong PX market will continue to provide strong support for PTA price. At the same time, PTA supply increases but is limited, and the downstream demand performs well. Therefore, the probability of PTA falling sharply after the Spring Festival is low.