PX Supply Is Too Large, PTA Downstream Demand Weakened

Driven by the collapse of crude oil, the entire petrochemical industry chain continued to fall, and the spot price of PX fell below 1000 US dollars / ton.

In recent years, the PX device in Asia has been cut down, but the scope is still small, and the overall supply is still adequate.

China's Pengzhou Petrochemical 650 thousand ton PX plant is scheduled to stop in mid December. Singapore's Jurong aromatics 800 thousand ton PX plant plans to stop in mid and late 12, and overhaul for about a month.

The main reason for the difficulty in reducing the output of the PX unit is that the production profit is acceptable.

Although the price of PX has dropped considerably, the price difference between PX and naphtha, PX and MX has been maintained above the profit and loss balance line.

Current domestic

The operating rate of the plant is around 70%, while the overall operating rate in Asia is at a high level of 76.7%.

In the case of a significant reduction in the downstream PTA device, the high PX operating rate will increase the supply pressure of the PX market.

Recently, the PTA production reduction alliance was re formed, and the PTA futures rose two times in November, out of the expectation of a reduction in production in December.

However, in December, although the PTA factory had substantially reduced production, PTA futures performance was not satisfactory, and hit a new low recently.

On the one hand, crude oil is down again. On the other hand, the market is worried about the actual effect of the PTA factory's reduction in production.

This production reduction lasted for only about half a month, and PTA manufacturers did not reduce the contract volume, while the downstream polyester factories were limited in procurement. Therefore, PTA spot prices did not improve.

The profit level is also an important reason for restricting the PTA factory's production reduction effect.

Although the reduction in production is relatively large, the cash flow from the PTA plant has been greatly improved and the power of the PTA factory to reduce production has not been much larger than the joint production reduction started in May.

When the off-season is coming, downstream demand is weakening.

At present, the downstream has entered the off-season, the more obvious decline is the terminal market operating rate, such as Jiangsu and Zhejiang loom load from early November near 81% down to 75%.

However, due to the relatively low inventory and good profit margins, the operation rate of polyester links remained near 80%, but production and sales had dropped.

With the weakening of terminal demand, polyester loading in the later stage is decreasing.

On the whole, the price of raw materials such as crude oil and PX is still in a weak position, and the effect of PTA reduction has not been recognized by the market. The decline in demand makes PTA futures more pressure, so the 5000 yuan / tonne barrier is at stake.