In 2019, Will The PTA Market Sing Half A Good Play?

In the past 2018, PTA futures was a well deserved "Star". Although it was unknown in the first half of the year, the main force of the PTA price in July broke through the key position of 6000 yuan. Up to the end of August, the PTA price hit a high of nearly 5 years, or 26%. Although the price of PX and PTA is rising repeatedly, the conductivity of downstream polyester market is not good. The cash flow of polyester products in various links has dropped to varying degrees, and the demand for PTA has been reduced greatly. After September, the price of PTA began to decline, and by the end of November, the price of the main period dropped to below 6000 yuan, or 24%.

It is estimated that in 2019, the new capacity of PX will be put ahead of the new capacity of PTA. In this process, the supporting role of cost to PTA will be greatly weakened. However, the increment of downstream polyester is still in the future, and the future market will be a game of cost and demand. Judging from the time node, PX prices are at a high level and there is still room for easing in the future. Therefore, the PTA market is still worth looking forward to in the first half of this year. And as the PTA production capacity is expected to approach, the PTA market will not be optimistic after the second half or the three quarter.

PTA increase production is limited, processing fee interval upwards.

The increase in PTA capacity was mainly concentrated in 2012 and 2014, when the growth rate was 64% and 30% respectively. Since 2016, only 2 million 200 thousand tons of new capacity of Jiaxing petrochemical company has been released. Although the PTA 1 million 200 thousand tons of Sichuan Shengda Chemical plant has been built, it has not been driven yet. According to statistics, at the end of 2019, there were 2 million 200 thousand units of new Feng Ming and 2 million 200 thousand tons of Hengli Dalian. The two installations accounted for nearly 10% of the current PTA effective capacity. It is expected to start in the fourth quarter of 2019 and there may be a further delay in the latter stage. After 2020, PTA production capacity will once again enter a period of rapid growth, and there is no new capacity in the first half of this year. Recently, only Fuhai has achieved the remaining 1 million 500 thousand tons capacity or put into production before the Spring Festival, which is not enough to trigger a dramatic change in the supply side.

In terms of processing fees, the capacity growth of PTA market has entered a stable period in 2014~2016, and the processing fees of PTA factories have been greatly reduced, and most manufacturers have suffered losses. In 2016, the average processing cost of PTA spot was 475 yuan / ton, reaching the lowest level in recent years. However, the industrial chain began to improve. Since 2018, the average processing cost of PTA spot was 944 yuan / ton. In late August, with the PTA price rising sharply, the processing fee climbed to a high level of 2294 yuan / ton, and then it began to drain, and the lowest processing fee reached 264 yuan / ton. Because PTA has limited new capacity this year, and the downstream polyester industry is still in a regular production cycle. By the end of this year, the PTA boom is still expected to maintain. The average processing cost of the spot is expected to be around 1000 yuan / ton.

PX production will be the biggest uncertainty.

In the month of 2018 7~8, the vigorous rise of the PTA market can not be denied the merit of PX. In the 7~8 month PTA industry chain outbreak process, PX price increase is higher than PTA price increase by 12 percentage points, of course, PX processing fees rushed to nearly 700 US dollars / ton high level, and even in the latter stage of this PTA price decline process, PX end still maintained a better profit. 2019 is the first year of PX production in China. Hengli petrochemical, Zhejiang petrochemical, Hengyi petrochemical and other installations are planned to put into operation. The total production capacity reached 12 million 600 thousand tons / year. Even if the 1/2 was calculated on schedule, the growth rate of PX in 2019 could reach 44%. Since China's PX needs to import large quantities, if these domestic capacity can be successfully put into operation, PX will also have more pricing power in the world while increasing its independent supply. In the first half of 2018, the average processing cost of PX was 362 US dollars per ton, and the average processing fee in the second half of this year was US $543 / ton. In the later stage of production increase, the processing cost of PX production link will gradually drop.

There is still a strong growth force in the polyester market.

Polyester industry chain is longer, and the growth rate of each link is different, which will cause changes in the supply and demand market. Since the second half of 2017, the polyester market has started the mode of increasing production under the impetus of favorable profits. In 2018, it has entered a period of accelerated growth. At the beginning of the year, 6 million tons of ~700 tons of capacity are expected to be put into operation, and the final actual market capacity is 4 million 875 thousand tons, the actual production ratio is about 75%, and the growth rate of polyester production in 2018 is 10.1%. Compared with the sporadic increase in upstream PTA and even PX capacity, the increase in polyester production capacity has brought positive benefits to the upstream market.

According to statistics, in 2019~2020, there is still a large number of polyester production capacity is expected to be put into operation. However, behind the rapid expansion, the cash flow of polyester products fluctuated in 2018, especially in the month of 7~8. With the increase of raw material prices, the profit of polyester market has shrunk once, resulting in a large number of slicing factories reducing production, and the downstream market is cold in November, and the polyester filament POY market is not very optimistic. The low efficiency of polyester industry will affect the speed of new capacity in 2019. Judging from the current planned capacity, the polyester production capacity is expected to be 6 million 850 thousand tons in 2019. If the 1/2 is calculated according to the annual production volume, then the polyester production capacity in 2019 will increase by 6.4%. It is expected that these new capacity will be released after the two quarter, which will have a certain pulling effect on PTA demand.