PTA price is expected to be weak before the Spring Festival holiday due to the aggravation of the contradiction between supply and demand of PTA, and the continuous accumulation of social inventory will also suppress the period price.
| Thiourea |
With the expansion of OPEC + production reduction scale and the conclusion of the phase economic and trade consultation agreement between China and the United States, the international oil price remained strong in December, PTA phase price also continued to rise, and the main contract rose to 4994 yuan / 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, PTA period price dropped.
New capacity of device maintenance hedge
According to the original plan, in December, 1.2 million T / a unit of Sinopec Thailand and 2.5 million T / a unit of Hengli Petrochemical (600346, Guba) line 4 were put into production. However, at present, the production time of these 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 operation rate of PTA plant in China is 93.47%, and PTA supply will remain stable in the short term.
Weak downstream demand
With the end of winter orders, the downstream polyester industry gradually entered the off-season of demand, and the deterioration of production profits forced polyester enterprises to reduce production and stop production from late November; in December, polyester enterprises continued to expand the scope of production reduction and stop.
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.
| Thiourea dioxide |
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 varieties of polyester will further decline, and the demand for raw material PTA will also weaken.
Social inventory is at a high level in recent two years
In December, with the decrease of PTA plant maintenance and the expansion of polyester plant shutdown, PTA ended the two-month trend of going to storage since the National Day holiday, and social inventory began to accumulate again. As of December 20, the social inventory of PTA in China was 1278000 tons, an increase of 11000 tons on a month on month basis, 580000 tons higher than that of the same period in 2018, and the inventory is still at a high level in recent two years.
In conclusion, despite the delay in the production of the units of Sinopec Zhongtai and Hengli Petrochemical line 4, and the increase in supply brought by the production of the new units will be offset to some extent by the overhaul of the units of Hellenization and yishanhua, there are still a large number of production reduction plans for the downstream polyester units before the Spring Festival holiday, and the start-up of various polyester varieties will be further reduced, and the demand for raw materials PTA will be weaker. Under the condition of stable supply and weak demand, PTA social inventory enters the accumulation mode again, and the later inventory will further increase the pressure.
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