PX Price Trend Affects PTA, Polyester Filament PX Industry Shuffling Is About To Start.

Remember the 18 day PTA spot slump?

On the same day, the PTA main contract fell in the afternoon and ended in the limit.

Meanwhile, two manufacturers in East China and Dalian have reduced their factory prices.

With the PTA spot slump, polyester filament is also ushered in a substantial price adjustment, some polyester factories offer a reduction of over 300 yuan.

And everything points to PX, the initiator of the incident.

In March, the impact of Hengli PX was visible after being put into operation. Recently, the sharp decline of PX for two consecutive days has again enveloped PTA and polyester filament in a bad atmosphere.

Why does PX affect the PTA and polyester filament significantly?

As the direct raw material of PTA, the price trend of PX will directly affect the price of PTA and industrial chain, especially in the change of cost.

According to industry experts, the price of PX was $1068 / ton last Monday, and the offer price at noon was $961 / ton on the 18 day. It could be seen that the price fell by more than 100 dollars / ton. Within two days, PX fell nearly 76 US dollars / ton, and such a large fluctuation is not common.

PX showed a decrease of 100 US dollars / ton, which is equivalent to PTA production cost reduced by more than 500 yuan / ton.

In the 13th Five-Year plan, the strategic goal of "PX self sufficiency rate to 65%-70%" will be set up in 2020. In recent years, in order to realize self-sufficiency of raw materials and respond to the call of the state, the private polyester giant has begun to go into refining and refining. In the next five years, the total capacity of PX in Asia will total 42 million 200 thousand tons, of which China's PX will account for more than 90%, and the overall growth rate will show blowout. In the ranks of the local PX enterprises in China, the downstream PTA private enterprises will become the first army to form an integrated production chain structure of "raw materials - finished products - downstream".

Therefore, the future PX is the largest variety in the whole category of chemical products. The domestic planning capacity is 40 million tons, and the growth rate is close to 300%, of which 18 million tons of private refinery account for about 46%, and if the two period is considered, it will be even higher.

At present, China's PX consumption is about 26 million tons, and the downstream PTA has an annual capacity of about 4 million 700 thousand tons in the next two years. Assuming that the new demand is 3 million tons per year, it is obviously not enough to digest the new supply of over 15 million tons per year.

Therefore, as several major private refinery giants have been put into operation, the PX supply side will usher in a huge volume. While the downstream PTA has capacity expansion, the new capacity can be very limited before the end of 20, and the demand side does not have strong support. The downward trend of PX price is inevitable. The era of high profit will not go back, and the industry pricing mode will gradually turn from oligopoly to cost pricing.

PX industry reshuffle path: Japan and South Korea and other high cost production capacity will first be squeezed out of the market, and finally to the six giants control.

With the current round of refinery and expansion, PX will usher in a gradual downward step. The device that will take the lead in commissioning is still expected to enjoy a high profit at the end of the cycle. The downstream PTA and polyester will also benefit from the profit shift caused by the PX price drop. Besides the price and profit, the future PX industry will also undergo tremendous changes.

From the announced production capacity planning, after the four major private refinery phase I is put into operation, the total PX market share will expand from the current 12% to 47%. If we take into account the withdrawal of some high cost production capacity, the actual market share will be even higher.

At that time, domestic PX production capacity will reach about 30 million tons, basically realizing the self-sufficiency of PX raw materials.

Therefore, after the first round of shuffle, it is estimated that the capacity of Japan and South Korea will be squeezed out of the market. The three barrels of oil, though not strong enough in the aromatics industry chain, will be attached to the long stream refinery, with the advantage of PX.

In the long run, zhe petrochemical and Hengyi have already announced the two phase of the plan. Rongsheng recently announced a 8 billion increase in the announcement, putting the two phase of construction on the agenda.

After the completion of refining and PTA assets, Sheng Hong completed the first phase of the project. The total capacity of the four private refinery will reach 20 million 400 thousand tons. The market share is expected to be close to 60%. In addition, it is not ruled out that the new PX project will be launched by Tung Kun and new Feng Ming as well as in the process of refining or short and medium run PX.

On the whole, with the gradual volume of refining and refining, the first round of shuffling of the PX industry is about to begin. The high cost production capacity of Japan and South Korea is expected to be squeezed out of the market first, and 2 years after that, PX is expected to achieve self-sufficiency in China.

If we take into account the possible expansion of the two phase of the project and the downstream PTA, we will further strengthen the competitive advantage of the polyesters in the aromatics industry chain after the full complement of PX in the long term. At the same time, other enterprises with high cost or single industrial chain will probably not survive. The aromatics industry chain is expected to finally go to the pattern of controlling the six giants.

(Zhao Zhen sees cycle, Zhuo Chuang chemical industry)