Chemical Accidents Frequent PTA Will Be Strong In The Short Term

4-5 month PTA plant centralized maintenance, and downstream load started to maintain high, the market entered the inventory stage, coupled with the strong performance of crude oil prices, it is recommended to hold more PTA.

Last Thursday, it was reported that Fuhai 4 million 500 thousand PTA / year equipment will be overhauled in May as planned, and PTA futures price should rise. In recent years, chemical plant explosion frequently occurred, and safety inspection and inspection became stricter. Some chemical industrial parks were closed, causing the chemical sector to rise in commodities and shares. Yesterday, PTA futures skip open high, once in trading. PTA prices are expected to remain strong in the short term.

Frequent chemical accidents

In March 21st, the chemical storage tank of Neijiang sutian Jiayi Chemical Industry Co., Ltd. (hereinafter referred to as "Tian Jia Yi") chemical storage tank exploded in the chemical industry park of Chia Jiayan Town, Xiangshui, Jiangsu, and affected 16 enterprises around. In March 31st, the container explosion in the workshop of the Han Ding precision Pioneer Metals Corporation processing center in Kunshan comprehensive protection area caused a fire in the workshop. In April 3rd, a fire accident occurred in the wastewater storage tank of Jiangsu Zhong Dan Chemical Technology Co., Ltd.

After the special explosion accident of Tian Jiayi company, the Guangdong provincial emergency management department quickly deployed a comprehensive and in-depth investigation of the safety risks of enterprises in hazardous chemicals, limited space and dust explosion related industries, and ordered enterprises to stop production and rectification.

In April 4th, Jiangsu issued the "Jiangsu chemical industry upgrading plan (Draft)", requiring the number of chemical industry enterprises to reduce to 2000 in 2020 and 1000 in 2022. On that day, Yancheng City decided to completely shut down the Xiangshui Chemical Industrial Park. As a result of the above news, stocks and commodities in the chemical sector rose sharply.

Stock turning point may arrive

In 2019, only Sichuan Shengda 1 million tons / year new device was put into operation in the second half of the year, and its capacity increased by 2%. In the first half of the year, the supply increased from Fuhai to 4 million 500 thousand tons / year, and the load increased from 50% to 80%. The polyester link is still growing at a high speed, with annual capacity growth approaching 9%.

Usually the Spring Festival holiday is a PTA storage period. By the end of February 2019, PTA's social stock was 1 million 160 thousand tons, which was 460 thousand tons lower than the same period in the past 6 years. In this context, centralized maintenance of equipment will result in a tight supply stage, thus contributing to the formation of inventory inflexion.

According to statistics, the planned PTA overhaul in 3-5 months involves a total capacity of nearly 17 million tons / year, which exceeds 1/3 of the total domestic capacity. Last week, the PTA load started to maintain a low level of 75.7%. In 4-5 months, nearly 10 million tons / year production capacity was shut down, and the load of PTA plant may continue to decline.

Compared with supply, the start-up load of polyester plant increased slightly to 90.6%, and the load of Jiangsu and Zhejiang looms was steady at 86%. Polyester factory cash flow performance is good, factory production enthusiasm is high. The formation of supply and demand scissors causes PTA to phase out inventory. This is also reflected in the poor processing. In March, the average processing of PTA spot was 852 yuan / ton, compared with 1000 yuan / ton in early April.

PX device load drop

On the international market, the load of PX plant started to decline overall. India trust 2 million 45 thousand tons / year installation plan 2 quarter parking inspection, Singapore ExxonMobil 2#42 million tons / year installation began in March 24th to stop maintenance for 35-40 days, Korea Shuanglong 2#90 million tons / year installation began in late March 3 and a half months, Malaysia 550 thousand tons / year installation plan 3-4 months to repair 45 days, South Korea modern 2#80 ten thousand tons / year installation plan 4-5 months maintenance for 30-35 days. At home, some new devices have been put into operation one after another. Constant force 2 million 250 thousand tons / year installed in March 24th formally put into operation, started load gradually increased; Zhonghua Hongrun Petrochemical 800 thousand tons / year PX new device preliminary plan May commissioning, commissioning in July. But there are also some devices planned to stop and repair. PetroChina Liaoyang Petrochemical 450 thousand tons / year installation plan 5-6 months maintenance and bottlenecks for 45 days; China Taiwan 1#28.7 million tons / year installation plan 4 months in mid and late maintenance 45 days, 2#57.3 million tons / year installation plan mid August maintenance for 2-3 weeks; Ukrainian Petrochemical 1 million ton / year installation plan May 4th, the beginning of a row of car maintenance for 2 months; Fuhai 2#80 million tons / year installation plan May parking inspection for 15 days.

This week, the load of domestic PX installations dropped by 14 percentage points to 68.3%; the PX price was 1037 US dollars / ton, equivalent to PTA cost 6027 yuan / ton; PX and naphtha oil price were 480 US dollars / ton.

On the whole, the closure of chemical industrial parks caused by chemical accidents and the reduction in the number of chemical enterprises will push up the PTA risk premium. In addition, the dynamic changes of the device are affecting the market nerves. The centralized maintenance of the PTA device in 4-5 months will bring about the overhaul of Fuhai new device in May. The load of the downstream installation will remain high, and the market will go to the inventory stage, and the bull's confidence will be further restored. Taking into account the strong performance of the crude oil market at the end of the cost, PTA futures prices will remain strong in the short term.