Polyester Into The Expansion Cycle 2019 In The First Half Of The PTA Bull Market Can Be Expected.

As we all know, in 2019, we will usher in the PX production capacity in the new year. We expect to have more than 10 million tons of PX capacity, which will have an impact on the cost of PTA.

But considering the time needed for PX to go into production, crude oil still has uplink power, and polyester production capacity has been expected to increase in 2019. We are still optimistic about the PTA market, and we still have bright prospects in the first half of this year.

PX production capacity still needs time.

WTI crude oil prices quickly dropped to $42 / barrel at the end of last year, and then stabilized.

In 2019, Saudi Arabia and other OPEC countries began to implement the production reduction agreement. We believe that OPEC+ will strictly limit production in the short and medium term.

From the data point of view, some OPEC countries in December 2018 have cut production by 40-50 barrels per day.

Saudi Arabia wants to raise oil prices to support fiscal spending, but worries about being seized by shale oil.

In 2018, the output of US crude oil increased by 1 million 400 thousand barrels compared to 2017. Considering that the growth rate of shale oil is highly related to the oil price level, and the change has a certain lag (2-3 quarters), we expect that the growth rate of shale oil production will fall sharply in the 2 quarter.

Therefore, there is still a driving force in the middle of the oil price, which does not exclude the possibility of Brent rushing again to US $70 / barrel.

On the PX side, in 2019, first sets of Hengli Petrochemical 2 million 200 thousand ton PX plant were expected to be delivered in 3-4 months. Due to the complexity and large scale of the device, we expect that the stable output will be delayed for some time.

At the same time, we are concerned about the overhaul of PX overseas installations.

According to CCFEI statistics, PX1 quarterly maintenance involves production capacity estimated at 1 million 620 thousand tons, the 2 quarter overhaul involves 9 million 325 thousand tons of capacity, and 3-4 quarter maintenance involves 4 million 365 thousand tons of capacity.

The above maintenance plans are all in 1-2 months. From the point of view of quantity, the output loss caused by overhaul is similar to that in 2018.

Therefore, before the new capacity is officially stabilized, there is little room for PX price down.

Polyester enters expansion cycle

The market is slightly pessimistic about the macro level in 2019, and the global economic risk is mainly caused by trade uncertainty.

The current Sino US trade dispute is beginning to show signs of easing, and it is not ruled out that the demand side is gradually out of the possibility of haze.

From the perspective of productivity growth, it is conservatively estimated that in 2019 polyester still has more than 4 million 330 thousand tons of capacity to be put into operation, 740 thousand tons in the 1 quarter, 1 million 200 thousand tons in the 2 quarter, 1 million 570 thousand tons in the 3 quarter and 820 thousand tons in the 4 quarter.

The corresponding PTA plant did not produce more capacity in 2019, only the possibility of Sichuan Shengda and Xiang Lu Petrochemical old plant resuming production.

Therefore, it is estimated that the PTA processing fee center will move up to 1000 yuan / ton in 2019.

The current stock pressure of polyester factories is not obvious. With the increase of profit margins of the bomb companies, the polyester production and marketing rate exceeds 100%, and the overall inventory is reduced to 13 days, which is at a medium low level compared with the previous years.

On the whole, crude oil rebound and maintenance of PX device cost support, polyester production capacity continued to ensure PTA processing profit thickening. Therefore, in the first half of 2019, PTA prices continued to rush to power. In the 1905 contract 5700-5900 yuan / ton interval, the construction price was mainly built, and the target price was near 7000 yuan / ton.