The Downstream Set Off A Concentrated Stock Craze. PTA Enterprises "Have To Live A Good Life".

At the end of the year, the focus was once again concentrated on the downstream terminal of the PTA industry chain.

This year, affected by the bottoming up of crude oil prices, the terminal of PTA industry chain carries out a round of centralized replenishment under the condition of relatively low raw materials.

At the same time, the overall demand for terminal demand is fairly good, and the profit of polyester production is good (except POY). The inventory is relatively low, and the pressure is significantly relieved than before.

However, it is important to note that during the long Spring Festival, there will be a seasonal decline in demand, and terminal weaving has begun to gradually reduce load.

The various links in the PTA industry chain have changed. What impact will these new changes have on the profit of the industry chain?

PTA downstream heat persistence doubts

Recently, the friends circle of polyester industry has published various recruitment information. The time for post is not after the Spring Festival, but before the Spring Festival.

Although it is now approaching the Spring Festival, polyester has welcomed the wave of centralized stocking before the Spring Festival.

It is learned that since the beginning of this year, the atmosphere of fabric turnover has not decreased with the drop in temperature. Polyester filament price has gone up, and polyester turnover has been quite hot.

It is understood that as of mid January, loom and polyester load is still relatively high level, weaving manufacturers are still working overtime production.

"After the end of the new year's holiday, boosted by the rise in international oil prices and the higher purchasing power from the downstream, the polyester filament broke the predicament of low production and sales and" one day tour "in the beginning of the month, and production and sales continued to improve, especially in the high volume of POY turnover.

On January 7-11, the mainstream production and sales rate of polyester was over 100, becoming the norm.

It is understood that the price of PTA and polyester filament surged and plummeted in the second half of last year, making the downstream stretch and weaving mentality more cautious, which also led to weak demand performance.

Until December last year, crude oil prices continued to down, polyester demand remained unchanged.

In 2019, with the rebound of crude oil prices, PTA followed up vigorously, and the enthusiasm of downstream purchasing was stimulated, and production and sales rebounded.

In addition, polyester entered the centralized maintenance cycle, the supply was reduced, the demand stage picked up, and the high storage pressure of polyester was effectively alleviated.

In one German futures analyst Zheng Youfei, last year, raw material prices fluctuated greatly disrupted the pace of terminal procurement, 7-8 months of raw material prices rose sharply, resulting in lower demand contraction, gray profit is also suppressed.

In recent months, crude oil prices have declined sharply, and crude oil has been rising steadily, and downstream demand has improved.

Due to the recent downstream replenishment (including demand for orders and speculative demand), plus the promotion of polyester factories near the Spring Festival, polyester filament will be "Crazy" before the Spring Festival.

By the end of 1, the total stock of polyester was 9-17 days, and the stock of major products had also returned from high inventory to the same period last year.

In terms of profits, other POY varieties are good cash flows except for the fact that they are still at a loss.

Lower inventory and better cash flow make some planned overhaul enterprises reduce production or shorten maintenance time.

"Generally speaking, the inventory level is high, and the polyester plant will first adopt a means of reducing sales promotion to reduce inventory. If prices are still poor or the loss is longer after the price is cut, it may be possible to choose production reduction or overhaul."

Zheng Youfei said that in fact, the seasonal weakening of polyester and weaving demand at this time of year is often the focus and main logic of the market, and this year is no exception.

Although the market still has the heat left after the "prosperous fire", Zheng Youfei believes that the gradual weakening of the downstream work before the Spring Festival is still relatively determined.

"With regard to weak demand, the focus is on downstream start-up."

Zheng Youfei said that starting from the second week of January, we saw the gradual decline of the weaving end. The polyester terminal was more powerful due to the replenishment of the terminal, and the inventory pressure was relieved.

It is estimated that centralized load reduction should not be excluded after late January, because some factories are relatively effective in terms of overhauling or reducing production time.

"Every Spring Festival is PTA storage time, and its own maintenance is less, and the downstream is greatly reduced.

Of course, the downstream negative margin and maintenance time are adjusted according to market dynamics.

In the case of a pet manufacturer in Zhejiang, the demand for seasonal weakness is obvious for PTA.

From the current PTA forecast maintenance, the 2-3 month plan is not overhauled, but Hengli Dalian 2 million 200 thousand tons and Jiaxing Petrochemical 2 million 200 thousand tons were originally planned to overhaul in January. Now it is postponed and is expected to be overhaul in the off-season February.

This will reduce the supply pressure in February, but the demand may decline more obviously in February, and it is expected to accumulate 40-50 tons in February.

However, with the gradual resumption of polyester after the holiday, PTA will enter a tight balance between supply and demand.

"PTA is expected to continue to improve after the off-season of the Spring Festival, which is one of the logic of the recent PTA rise."

Zheng Youfei said.

PTA high processing fees or become normal

It is found that in the PTA industry chain, there is always an indispensable factor in judging Prosperity: processing fees.

The processing fee reflects the profit of PTA spot processing, and is also the focus of attention of the market participants in each survey.

In the industry, the level of processing fees will directly affect the enthusiasm of enterprises, and then affect prices through supply.

"Under normal circumstances, the processing fee is high, PTA production profit is good, enterprise production enthusiasm is high, PTA supply has increased expectations, processing fees are low, enterprise production enthusiasm is low, PTA supply has reduced expectations."

Pang Chunyan, an analyst of China investment and Anshun futures, said.

According to Pang Chunyan, 2014-2016 years PTA processing fee is at a low level, and some of the higher costs are difficult to make. Therefore, Fujian Jialong, 600 thousand tons, 900 thousand tons of Peng Wei petrochemical, 700 thousand tons of Hon Bang petrochemical and 650 thousand tons of Yisheng petrochemical company have been parking for a long time. Liaoyang Petrochemical 800 thousand tons, BP Petrochemical 600 thousand tons, Yisheng Ningbo 650 thousand tons and other poor profitability device directly withdrew from PTA.

Since the end of 2016, PTA processing fees have picked up. Some of the long-term parking devices have been restarted, and Peng Wei petrochemical, Fujian Jialong and Hon Bang Petrochemical small line have been restarted.

In 2018, the PTA processing fee remained at a relatively high level. Therefore, the production enthusiasm of enterprises was very high, and the overproduction was more common.

It is learned that the processing fees of chemical products are greatly influenced by technological improvement and expansion of production scale.

Take PTA as an example, before 2009, the scale of PTA installations in China was basically below 700 thousand tons, and the processing cost was about 1000 yuan / ton. After 2010, the production cost was about 1 million tons, and the processing cost dropped from 1000 yuan to 700 yuan / ton. After 2015, the commissioning equipment was basically over 1 million 200 thousand tons, or even more than 2 million tons, and the processing cost dropped to 600 yuan / ton.

In recent years, the scale of PTA production of leading enterprises has been expanding, and the cost advantages of large enterprises are obvious.

In addition, the equilibrium point of PTA Processing Fee mentioned in the market is 580 yuan / ton, which is only the average situation of the industry, and the actual processing fee of each enterprise will be different.

Pang Chunyan said.

In fact, processing fees can not only be used as a criterion for judging the production enthusiasm of enterprises, but also are usually regarded as an important part of the trading strategy of investors.

"2014-2016 years, domestic traders refer to PTA processing fees to operate more widely."

Pang Chunyan said that when processing fees were below 400 yuan / ton, they would do more PTA, and they would be short of PTA when they were higher than 700 yuan / ton. The strategy was effective in the serious period of PTA overcapacity.

However, from the end of 2016, the situation of overcapacity in domestic PTA began to slow down. In 2017, the restart of the Peng Wei petrochemical plant represented the era when PTA bid farewell to the low processing fee. In the second half of 2017, the PTA processing fee began to pick up, and the processing fee of 900-1000 yuan / ton became the norm.

In the 3 quarter of 2018, the processing fee exceeded 2000 yuan / ton for a while, reproducing huge profits. Although it lasted for a long time, it exceeded the expected performance completely and broke the industry's staring at the high processing fee, shorting PTA's traditional thinking.

But PTA's huge profits squeeze the downstream living space, so it is difficult to sustain.

"PTA prices fell from the beginning of the 4 quarter of last year from the initiative of PTA enterprises to make profit, followed by the decline in oil prices and the consumer side continued to be pessimistic, PTA processing fees back to less than a ton of 1000 yuan."

Pang Chunyan said.

According to the plan announced in 2019, domestic PTA has limited new capacity, especially in the first 3 quarters.

"From the whole year, the increase rate of PTA supply is difficult to meet the growth of polyester end consumption, and the tight supply of PTA will continue. Especially in the two or three quarter, a large number of domestic PTA devices have entered the new year overhaul period. PTA supply will remain tight pattern, so high processing fees will become the norm."

Pang Chunyan said, but at the end of 2019, with the advent of the new round of PTA devices, the PTA will again face the dilemma of overcapacity. The high processing fees will go down as new capacity goes into operation.

PX profits will shift to the middle and lower reaches

Since the end of 2016, polyester industry has entered the industry boom cycle, especially in the 3 quarter of 2018, reaching the climax of industry boom.

From the perspective of PTA industry chain profit, the supply and demand pattern of every link of PX-PTA-PET has been improved in the first two years with the slowing down of PX-PTA capacity expansion and the demand expansion of global economic recovery.

"PTA pyramid type production capacity growth rate has made PX's profits far higher than PTA and polyester links. Especially PTA, driven by the high demand for polyester, has gradually shifted from overcapacity before 2016 to a tight balance between supply and demand.

In 2017, PTA manufacturers made a profit of 122 yuan / ton, with a profit of 378 yuan / ton in 2018.

Li Jing, an analyst at Minmetals futures, said.

"Overall, the PX profit of upstream raw materials is the largest and the strongest.

PTA link production profit has expanded year by year, and in a particular period, showing a sharp upward trend of downward trend.

Polyester production profits expanded slightly in 2015-2018 years.

At present, the profit of the industry chain is mainly concentrated in the upstream PX link, and the profit of PTA and polyester links is relatively low.

Wang Guangqian, an analyst at Soochow futures.

It is learned that profit distribution is closely related to the supply and demand pattern of every link and the upstream and downstream industry chain game.

The healthy operation pattern of the industry must be profitable in the middle and lower reaches of the whole industrial chain. If the profit of a certain link is shrinking or even losing, it will affect the supply of its own products, which will play a two-way role in the upstream and downstream products.

"On the one hand, it will lead to a reduction in upstream raw material demand, which will further reduce the cost of raw materials, which will lead to lower costs. On the other hand, it will help improve the supply and demand of products, and then enhance the bargaining power of products. When the supply of products is reduced to a certain extent, the cost side will decline, and the price of their products will rise as a result of supply and demand improvement, and their production profits will be improved."

Wang Guangqian said that the distribution and pfer of profits in the industrial chain will be adjusted spontaneously through the marketization mechanism. For a long period of time, there is no possibility of long-term losses or long-term profits of the whole industry chain.

The current PTA industry chain profit situation is more healthy than before, all sectors of the industry are profitable, especially under the stimulation of PX substantial profits, the domestic large-scale introduction of large-scale refinery and petrochemical equipment, the 2-4 quarter of 2019 or 13 million 300 thousand tons of effective production capacity will be gradually released.

The polyester link has been stable for nearly two years, and it has also promoted the rapid growth of polyester production capacity since 2018. It is estimated that 2019 will continue to add about 4 million 400 thousand tons of polyester production capacity.

"It is estimated that the PX production profits in 2019 will be accompanied by the commissioning of PX's new capacity, and will be substantially reduced to PTA downstream.

Demand side polyester new capacity release is higher than PTA, will pfer part of profits to the upstream PTA.

Li Jing said.

In the view of the industry, with the new capacity of PX put into operation in the late stage, the pfer of PX profits to the middle and lower reaches is the general trend. However, when the new PX capacity is put into operation, it is a big uncertainty.

It can be expected that in 2019, the profit distribution of the whole industry will show a trend of profit contraction at the upstream and downstream ends, and PTA manufacturers will be highly profitable or normal.