Demand Starts Slowly In Peak Season, PTA Starts Low.

The recent decline in PTA prices is mainly driven by the upstream market.

WTI crude oil has fallen nearly 15% since mid June, while PTA's direct raw material PX is also very weak.

PX price declines, on the one hand, is caused by the decline of crude oil; on the other hand, it is the increase of PX supply.

India Oil and Natural Gas Corp's new device is scheduled to open this week due to technical problems, which will stop at the end of August.

Singapore's Jurong aromatics 800 thousand tons / year PX plant was put into operation in September 7th.

Fujian Tenglong group's 1 million 600 thousand ton / year PX plant in Zhangzhou was reopened in September 9th after its shutdown in August 20th.

Due to the early stage

The situation is better, PX

In the 7-8 month, the domestic PX output increased sharply, especially in August, the domestic PX output hit a new high. Fortunately, the import volume of PX in 7-8 months was not high. However, due to the increase in domestic production and the low PTA operating rate, the demand for PX did not expand. At present, the social stock of PX is still increasing slightly, and the price of PX continues to be suppressed.

In addition, with the recent fall in PX prices, PX production cash flow has been compressed.

The price difference between PX and naphtha in late July was running at the level of $500 / tonne, leaving a large break even of 300-350 US dollars / ton, but at present, the profit margin of PX has been greatly reduced. The difference between PX and naphtha is about 350 US dollars / ton, which is close to the break even area, or it will affect the initiative of PX plant.

Low operating rate of PTA

Since May, the load of PTA factory has been decreasing.

In July, the average load of PTA installations in China was around 67%, and in August it was further reduced to about 60.5%. In some of the periods, the operation rate was only around 55% because of centralized maintenance.

In terms of output, according to the calculation of China chemical fiber information network, the domestic PTA monthly output level in August was about 2 million 270 thousand tons, which was significantly reduced by 160 thousand tons compared with 2 million 430 thousand tons in July.

However, due to the low running rate of polyester in the lower reaches, the insufficient demand for PTA, the total supply of PTA in August still has a small surplus, and the PTA social inventory has risen from about 1 million 380 thousand tons at the end of July to about 1 million 490 thousand tons at the end of August, but it is still low in the year.

Although the price of PTA has been adjusted recently, the cash flow situation of PTA factory has been improved due to the proper control of PTA operation rate, and the alliance has achieved some effect.

At present, after calculating the cost of spot PX, after deducting the processing cost, PTA production basically achieves losses, and the enterprises with better control of individual cost even earn a small profit.

Demand starts slow in peak season

For this year's PTA industry chain performance, downstream polyester significantly lag behind the PTA link.

When PTA rebounded rapidly in 5-7 months, polyester prices failed to keep up with the pace, resulting in a loss expansion due to higher costs.

But now it has entered the peak season, but the polyester start up rate is very slow. At present, the comprehensive load of polyester has only risen from 65.8% in the early August to 70.6%. The peak season in the past year is basically over 80%.

However, it is worth mentioning that the stock of polyester products is relatively low, the profit recovery is good, and the load of terminal looms has increased rapidly. The load of Jiangsu and Zhejiang looms has reached 78%, higher than that of the same period last year.

On the whole, the PX price is close to the cost support line after the upstream PX weakens.

The implementation of PTA's production reduction is better, and the overall social inventory is not high. The supply pressure of PTA in September is not large.

At present, the leading factor of PTA market will gradually shift from PX to the recovery of downstream demand, and the performance of polyester links becomes the key.

In the short term, PX has not stopped yet, and the downstream peak season starts slowly. PTA will remain low oscillating for some time to wait for further recovery.