China PTA Industry Development Research And Outlook Report Press Conference Held

The healthy development of PTA industry is inseparable from the cooperation of government, enterprises, industry organizations, intermediaries and financial institutions. This report puts forward some specific suggestions. From the perspective of enterprises, we should invest prudently, strengthen win-win cooperation among enterprises, and establish channels for international cooperation. From the angle of government, we should strictly enter the system, enforce the withdrawal mechanism and strengthen the coordination of supervision. From the perspective of industry organizations, we should further strengthen the coordination ability, guidance ability and orderly operation of trade associations. From the perspective of intermediaries and financial institutions, we should strengthen professional evaluation, fully assess risks and avoid the waste of funds.

"China has now changed from the largest PTA importer to a net exporter, but in the face of international competition, the export path is not smooth, and domestic overcapacity is" pressure mountain ".

In order to better promote the healthy development of China's PTA industry, the petroleum and Chemical Industry Planning Institute organized the research and Prospect of the development of China's PTA industry. In September 23rd, it held a press conference on "China's PTA industry development research and Outlook" aimed at "resolving excess capacity, relieving the plight of the industry, and guiding cooperation and win-win".

According to the research report, China's PTA technology has made rapid progress since the beginning of the new century, and its supply capability has been greatly improved, and import substitution and self-sufficiency have been achieved.

However, the rapid outbreak of capacity has resulted in overcapacity, intensified market competition, and rapid decline in the profitability of the industry.

In the long time ahead (before 2020), China's PTA industry will still maintain a situation of oversupply, and the profit situation is not optimistic.

The report considers that the technological level, location conditions and upstream and downstream correlation are the important factors that affect the competitiveness of PTA enterprises.

Because of the market and competitiveness, there is a lot of idle production capacity in China's PTA industry, which not only increases the burden on enterprises, but also wastes social resources.

According to statistics, PTA production capacity increased from 3 million tons per year in 2000 to over 50 million tons / year in 2016.

After the rapid growth of production capacity, the PTA market has changed from insufficient supply to overcapacity, and the market competition has become increasingly fierce.

At the same time, the situation of PTA upstream and downstream industry chain is also changing rapidly. The growth rate of the downstream polyester industry is slowing down, the support for PTA demand is weakened, the demand for PTA is sluggish, the upstream PX capacity growth is blocked, the long-term supply is insufficient, PX prices remain strong, and the proportion of raw materials in the production cost of PTA is rising.

The overall profitability of PTA industry has declined rapidly.

Since 2013, China's PTA industry has been running for a long time in a small profit or even a negative profit range.

Since 2014, China's PTA industry has seen a large number of production capacity shutting down and limiting production, and the other half of the new plant has been put into production continuously.

According to incomplete statistics, in June 2016, China's PTA industry shutting down PTA production capacity exceeded 14 million tons / year, exceeding the total capacity of PTA 1/3.

On the one hand, due to the increasingly prominent overcapacity, in the fierce competition in the market, some of the poor market competitiveness of the PTA device is overburdened, and is in a long-term shutdown.

Due to the lack of a perfect market exit mechanism, the PTA device in a closed state is "dead but not stiff" and can not achieve capacity upgrading.

On the other hand, PTA industry participants continue to launch large PTA projects with the support of local governments and financial institutions for the purpose of industry integration, enhancing competitiveness and occupying market share, resulting in further overcapacity of PTA industry.

China's PTA industry has become highly market-oriented.

Market participants are pluralistic.

Unlike petroleum refining, ethylene, aromatics and other petrochemical industries, China's PTA industry does not have a nationwide industrial development plan.

PTA market participants from their own perspective to observe and understand the Chinese PTA industry, enterprises, governments, financial institutions and other aspects of the lack of overall understanding of the PTA industry situation.

The research report clearly stated that "in the next 5 years, the PTA industry is expected to remain in a state of serious overcapacity, and the profitability of the industry will remain depressed for a long time."

2012 is the watershed for the development of China's PTA industry.

Before 2012, China's PTA industry developed rapidly, and supply and demand flourishing. The industry maintained a high profit level while developing rapidly.

After 2012, production capacity increased rapidly, market supply began to overrun, competition among PTA enterprises intensified, and industry profitability level declined rapidly.

PTA industry concentration increased, leading enterprises to determine the level of market profitability.

In the process of PTA capacity growth, industry concentration is constantly improving, and capacity is highly concentrated to leading enterprises.

Under the situation of excess capacity, in order to maintain market share and ensure its cash flow and financing channels, leading enterprises are squeezing competitors' market space through price means.

PTA market price is no longer determined by the highest marginal cost, but by the lowest cost enterprises in the industry.

The report points out that local governments,

Play an important role in the development of PTA industry.

Although the main players in the PTA industry have been pformed into private enterprises, local governments are still playing an important role in pushing forward the new PTA project and the backward production capacity. Local protection bears some responsibility for the current state of overcapacity.

The support of financial institutions is also crucial to the development of the PTA industry. The rapid growth of capacity after 2010 is closely related to the credit easing policy.

In the current industry situation, financial institutions should be cautious about PTA projects and avoid the phenomenon of bad loans caused by low competitive projects.

The competitiveness of PTA enterprises and installations is determined by the technical level, location conditions and the correlation between upstream and downstream industries.

Through the assessment of the above three factors, the report thinks that the overall competitiveness of China's PTA in the first group is about 22 million tons / year, which is the main force determining the situation of PTA industry.

Profitability and anti risk ability of PTA double low production capacity of about 7 million 800 thousand tons / year, is in the edge of the market eliminated.

When evaluating and evaluating PTA projects, investors, governments and financial institutions should give full consideration to various factors.

Apart from the scale and technology level, location factors and upstream and downstream industries association also play an important role in the competitiveness of PTA, and sometimes even play a decisive role.

The report points out that China is in a state of closure due to various reasons.

The total capacity of the plant is as high as 14 million tons / year, which accounts for about 1/3 of the total capacity.

Compared with the PTA devices in other Asian countries, the average life cycle of China's PTA devices is too short, which can not only bring the expected profits to the enterprises, but also lead to the high non-performing loan ratio of banks and the serious waste of social resources.

Through the comprehensive evaluation of the competitiveness of the PTA device, the PTA market in the next 5 years will have a 5 million 300 thousand ton / year PTA capacity which is likely to be shut down.

In view of the current market situation and development trend, the research report also puts forward suggestions for the relevant parties in the PTA industry.

PTA potential investors should invest cautiously.

PTA enterprises should avoid vicious competition, strive to achieve win-win cooperation, and explore ways to resolve excess capacity through "going global".

The government and regulators should strictly access conditions, improve the exit mechanism of backward production capacity, and strengthen industry regulation from the perspective of energy conservation, emission reduction, environmental protection and safety.

Improve the competitiveness of the industry and improve the independence and working ability of the trade association.

When approving new PTA projects loan financing, financial institutions should carefully assess project risks and avoid repeated occurrence of bad loans arising from low competitive projects.