In The Big Event Market, PTA Is Still Walking On The Tip Of The Knife.

In 2015, for the domestic PTA industry, two important events profoundly affected the whole industry: first, the 3 million 200 thousand ton / year PTA plant of Zhejiang Far East petrochemical company was liquidated due to the owner's capital chain rupture, and the plant was then shut down. Secondly, the PX of Fujian Zhangzhou Tenglong stopped production because of the accident, and its downstream PTA plant material was cut off and stopped.

The PTA industry in China has first emerged that capital holders are not new capacity but rely on restructuring and controlling the new format of PTA entities. It has become the largest asset reorganization in the history of PTA industry in China: Hua Bin took over the Far East; Fujian's state-owned assets took over 90% of Tenglong PX and downstream PTA, and became state-owned capital holding enterprises.

The two restructuring involves 7 million 700 thousand tons / year of production capacity, which is a rare asset in the domestic chemical industry.

The two major enterprises after the reorganization continue to maintain two seats of the four largest PTA producers, and have an impact on the domestic PTA industry. By the end of 2017, after two years of withdrawal from the operation of the two major enterprises, some of the devices were restarted to form a market supply capability. At present, the PTA producing areas in China are mainly concentrated in Liaoning, Jiangsu, Zhejiang and Fujian, and the capacity is concentrated in four major enterprises.

Concentration of production areas, capacity concentration, overcapacity, supply and demand cycle will no longer be obvious, leading enterprises gradually grasp the pricing power.

Since September last year, the price of PTA has continued to decline, from over 9000 to 5000 yuan / ton, and the PTA price of capacity expansion is very similar to that of 2012-2015 years.

And since 2019, there are also two important events affecting PTA industry:

1, Hengli petrochemical refining and chemical integration project PX has become the turning point of the profit change of polyester industry chain.

As PX entered the production capacity concentrated release period and PTA production capacity slowdown showed an uneven pattern, especially in recent years, the downstream polyester speed up, prompting the polyester industry chain profits gradually tilt to PTA, in 2019, PTA profit expanded to 1700 yuan / ton.

2. In 2019, with the new installations such as Tong Kun, new Feng Ming and Heng Yi put into operation, the polyester industry was further concentrated. At present, Tong Kun, new Feng Ming and Heng Yi production capacity account for more than 30% of the total polyester.

Looking at the current polyester industry chain, PTA industry chain upstream, middle reaches and downstream have entered different stages of development. Polyester industry will show a diversified trend.

Policy support, profit driven China opens the new era of PX capacity expansion, and the dependence on imports has declined sharply.

The PX installations announced in recent years are mostly part of the integration project. The most typical one is Hengli Petrochemical's annual output of 4 million 500 thousand tons of PX plant, and the annual output of 4 million tons of PX in Zhejiang petrochemical company. The scale of the two sets of equipment can be described as an aircraft carrier level in the industry. In addition, as an important piece in Hengyi group's overseas industry chain layout, the PX installation of Hengyi Petrochemical Brunei refining and chemical project will also serve its downstream production in the country.

As indicated above, the raw material supply gap of large private PTA plant is still estimated, but compared with actual demand, the raw material external exposure has been greatly narrowed. In 2019, the nominal capacity of China's PX increased by 9 million 500 thousand tons, and the effective new capacity increment was about 5 million 100 thousand tons in the year.

The data superimposed this year's Fuhai PX plant. The effective capacity growth rate of PX is about 55% in 2019, and the PX industry can be considered as a fast lane for development. Therefore, the problem of oversupply of PX in Asia will be highlighted during the year, and the trend of PX price trend will be obvious in the long term.

In 2019 Q4-2020, there was a total of 7 million tons of new capacity production plan of Zhejiang Petrochemical, Dongying Union, Hainan refining and Sinopec and Quanzhou in PX. With the improvement of domestic self-sufficiency rate, the dependence of PX imports will fall from 60% to less than 30% in the future.

PTA entered the peak production capacity and intensified competition in the industry.

At present, PTA market share is concentrated in the hands of private enterprises. Among them, the largest supplier is Yisheng petrochemical, the cumulative effective production capacity is 13 million 50 thousand tons / year, accounting for 29% of the total PTA capacity of China now; followed by Hengli petrochemical, the cumulative effective production capacity is 6 million 600 thousand tons / year, accounting for 15% of the total capacity.

As shown in the following table, the PTA factories with larger capacity in eastern China have all the supporting capacity of polyester, and supply and demand can basically maintain a balance. Because of the huge capacity advantage of Yisheng and Hengli, the contract supply and spot cash of polyester factories mainly come from these two enterprises.

Compared with small polyester factories, polyester leading enterprises are more likely to be restricted by raw material sources. In order to ensure the stability of raw material supply, resist the risks brought by price fluctuation and grasp the initiative of pricing, polyester leading enterprises begin to explore the upstream industry chain. Before the Tong Kun group has made a good example, the new city Feng Ming Group has extended its original focus on polyester filament business to the PTA industry.

In 2019 Q4-2020, there was a total of 18 million 800 thousand tons of new capacity production plan of Hengli petrochemical, Ningbo Yisheng, new Feng Ming, Honggang petrochemical, Fujian Honghong and so on. The competition in the PTA industry will further intensify in the future, and once again enter the low processing fee range in the future, the profits of the industry will gradually shift to polyester. "PTA"

Polyester industry concentration trend unchanged, differentiated fiber into a new battleground for industry competition

Data show that in 2019 polyester production capacity of about 4 million 390 thousand tons, nominal new investment capacity growth rate of only about 6%. This is mainly due to the polyester industry has experienced 2017-2018 years of high speed polyester production after the initial weakness, the pressure on finished product inventory. In the past four months, the terminal weaving factory was mainly passive replenishment, and the high production and marketing status promoted by the upstream release was not sustainable. Therefore, the polyester industry is facing an awkward situation in the busy season.

As the largest downstream of the polyester industry, the statistics of the textile sector are not very optimistic. Therefore, in the long term weakening of the macro-economy, the increase of terminal inventory and profit pressure and the negative feedback to the polyester industry, some devices have the possibility of postponing the production, and the actual production can be lower or lower than expected. In addition, the promotion of production and sales data through a substantial promotion will also put pressure on polyester plant profits and the possibility of corresponding adjustment of start-up load.

Although polyester exists in 2020, 5 million 950 thousand tons of polyester production capacity plan is put into operation. Due to the limitation of production technology, the production of polyester capacity in the past two years is still dominated by Tong Kun, new Feng Ming and Heng Yi. However, due to the weakening of competitive advantage of conventional products, differentiated fiber has become a new battleground for the competition of polyester industry.

The Sino US trade war has dragged down the terminal industry, accelerated the transfer of the terminal industry and the export of the spinning industry. The US tariffs on China involve nearly 41 billion dollars in textile and clothing industry, and the future trade barriers will become more serious. Moreover, due to the high labor cost in China, the terminal garment industry has shown a trend of transferring to Southeast Asia. With the escalation of Sino US trade war, the trend of southeast garment industry will be further accelerated. At the same time, due to the slow growth of polyester production capacity in Southeast Asia, this will exacerbate the export of the spinning industry. (source: Zhuo Chuang, annex)