The Crude Oil Market Also Heard "Explosions". How Do We Interpret The Future Of Polyester Raw Materials?

We remember that the recent attack on Saudi oil fields has aroused the nerves of the global textile people, and textile polyester raw materials have jumped several times with oil prices. But this incident is not over yet. The new emergency is coming again.

According to the Iran Student News Agency (ISNA) October 11th, an oil tanker in Iran exploded and ignited near the port of Jeddah in the morning, causing a large amount of oil to leak into the Red Sea. Technical experts say this is probably a terrorist attack. ISNA said the tanker belonged to the Iran national gas company, and the two fuel tanks on board were damaged in the explosion, and the oil was leaked into the Red Sea.

Technical experts are investigating the cause of the explosion. According to reports received by ISNA, the damaged oil tanker was not sunk, except for the damaged fuel tank, and no one was injured or killed in the explosion.

On the same day, Brent crude oil continued to go up and broke through the US $60 mark, setting a new high since October 1st.

Since September, the oil market has encountered the "black swan event" in Saudi Arabia, and the arrival of "Kim Gu" has led to a sharp rise in crude oil and its industrial chain, which attracted a large number of chemical manufacturers to frantically stock up. During the small holiday period, crude oil continued to fall. After the holidays, crude oil showed a rise and then fall, and it has certain regulatory capability for the oligopoly market, such as the joint production reduction agreement under implementation. At the same time, the cost of shale oil is supporting, and the hidden troubles in the Middle East are still there. At present, under the influence of many factors, the trend is still unknown.

How does the international crude oil price affect the price trend of our polyester market? Different people have different understanding of it. The international crude oil price we refer to actually refers to the price of international crude oil futures. At present, it is customary to use the most influential WTI crude oil futures price as the vane of the market.

But since July of this year, the price of PX market in Asia has plummeted with the launch of PX installations. As more PTA plants come into operation, PTA has excess capacity, which is beyond the ability of several giants to control the market, so the price goes down all the way, and from now on, its relationship with crude oil prices is getting smaller and smaller.

So, will PTA go downhill as usual, or will we go back to following the big brother of crude oil?

Increased supply is expected to increase.

In 2019, the PTA industry welcomed the peak of production. The four quarter of this year, the new Feng Ming and Hengli petrochemical installations planned to be launched, were the focus of the market. The two devices originally planned to be put into operation in October and are postponed to November and December respectively. After the National Day holiday, Hengli Petrochemical started to turn over two PTA production lines. In addition, there were overhaul schemes in 10 to November, including Han Bang petrochemical, Ya Dong petrochemical and Honggang petrochemical. According to the 15 day maintenance cycle, the output loss caused by the overhaul during the year is about 500 thousand tons, which still can not completely offset the increment of the new capacity released during the year.

According to the current average operating rate of polyester plant 90%, the existing PTA capacity has been relatively surplus. In the late PTA productivity growth background, overcapacity will become increasingly evident. However, in the short term, due to the delay in new capacity and the centralized maintenance of many devices, the PTA price has been slightly boosted, but there is little room on the top.

Cost support is no longer supported.

The fourth quarter of 2018 is the best profit for PX industry. With the release of domestic refinery facilities, PX's new capacity has been put on the market, and PX profits have sharply reduced in 2019. In the three quarter of this year, the average PX processing fee was only 331 US dollars / ton, down 245 US dollars / ton compared with the fourth quarter of last year. Earlier, under the background of Saudi oil field attack, chemical products prices rose, while PX prices were relatively weak, showing the weakness of PX supply and demand. 9 in the middle of the month, the PX- naphtha oil price difference dropped to below US $300 / ton, less than half of the beginning of the year. Taking into account the future output of PX's new capacity remains to be large, the PX- naphtha oil price difference will remain low.

Recently, the PTA spot processing fee has dropped to a low level of 800 yuan per ton, while the PX price has been hovering near the US $800 / ton, which has weakened the supporting role of PTA price. PX is unable to support the PTA market when it comes to the peak of production.

Downstream demand lacks traction power

During the National Day holiday, the stock market of polyester market has been rising due to the holiday of some weaving factories. After the festival, polyester POY stocks are mostly in the vicinity of 7 to 12 days. FDY stocks are mostly around 10 to 15 days. DTY stocks are mostly around 20 to 25 days, and are generally higher than before. In the past two days, the replenishment of many factories has increased the production and sales of polyester products, but the mainstream production and sales of filaments are still only about 70%. Polyester factories are still in the storehouse cycle.

After the holiday, polyester factories failed to perform well, and some cash flow of polyester products had fallen into losses. According to the relevant data, from 1 to September, a total of 2 million 900 thousand tons of new production capacity of polyester were added to the domestic market. Although the new capacity plan of about 2000000 tons was released in the later stage, with the decline of polyester profit, the delay probability of new capacity production was very large. At present, the terminal orders are not optimistic, and the price of polyester is suppressed.

In the near future, the impact of crude oil boosted, in the new capacity has not yet been put into operation and some manufacturers overhaul background, short-term PTA or a slight boost. (source: futures daily, observer network)