The Contradiction Between Supply And Demand Of PTA In China Deepens The Trend Of Cost And Processing Fee.

In recent years, with the continuous development of PTA industry chain, the processing profit of industry has changed greatly along with the changes in supply and demand of PX, PTA and pet terminals. PTA is in short supply, the processing profit is relatively rich, and gradually oversupply, and the processing profit is compressed.

Beginning in 2019, PTA officially entered a rapid increase in production cycle. In 2019, Sichuan Shengda 1 million tons / year and new Feng Ming 2 million 200 thousand tons / year PTA plant has been successfully put into operation at the end of May this year at the end of May this year. Next, December 20th Xinjiang is expected to put into operation 1 million 200 thousand tons / year and the four phase 2 million 500 thousand tons / year that is expected to be put into operation in December 28th, which is also attracting market attention, and the PTA production capacity will reach 15% highs. The rapid increase in production capacity has greatly reduced the profits of the industry. PTA's processing fees also dropped to 480 yuan from the first half of the average processing fee of 1187 yuan, which dropped by more than 59.56%. PTA prices also fell from the average price of 6314 yuan / ton in the first half to 4835 yuan / ton, or 23.42%.

Figure 1 PTA price and profit trend

Source: lung Chung

With the gradual increase of new production capacity, both the upward PX and the down polyester plant cost have also entered the margin of loss, and later PTA processing fees or further create a new low. According to long Zhong information, Hengli Petrochemical's latest line 4 device has a fixed cost of only 350 yuan / ton, so the current PTA processing profit is at a low level in the year. However, at present, PTA still has some compression space in the rapid expansion of production capacity.

The processing cost of PTA plant is often affected by the scale of equipment, technology, investment cost and so on. According to the processing cost of enterprises at present, it can be divided into three main categories: one is the size of less than 1 million tons, the processing cost is about 700~900; the second category is about 100~150 of the size, which is mainly put into production after 2010, and the processing cost is about 600~700. Of course, some small devices are less expensive because of depreciation and processing costs.

   Table 1 main production indicators of PTA

time	Installation scale (10000 tons) )	PX Unit consumption (ton)	Acetic acid consumption (ton) )	Energy consumption per unit (yuan) )	Processing cost (yuan)
Two thousand year	30-60	Zero point six six	Zero point zero four five	Three hundred and twenty-five	700-800
Two thousand and five year	60-70	Zero point six five	Zero point zero four five	One hundred and eighty	700-750
Two thousand and ten year	90-110	Zero point six five five	Zero point zero four	One hundred and fifty	600-700
Two thousand and fifteen year	120-220	Zero point six five five	Zero point zero three seven	One hundred and thirty-five	500-600
Two thousand and twenty Year E	200-250	Zero point six four four	Zero point zero three zero	One hundred and twenty-five	350-550

Source: lung Chung

From 2000 to the end of 2019, with the upgrading of the refinery and petrochemical integration plant, the technology of PTA plant has been greatly improved and the capacity of the plant has expanded continuously, from 30-60 tons in 2000 to 2 million 200 thousand tons at present, and 2 million 500 thousand tons in constant force. PX's unit consumption level also dropped from 0.66 yuan to 0.655 yuan, and the consumption of acetic acid dropped from 0.045 yuan to 0.03 yuan. Processing fees also dropped from 700-800 yuan to the current 400-600 yuan. There is no doubt that in the PTA's production capacity, enterprises such as Yisheng, Hengli, new Feng Ming and other PTA plants with 2 million tons or more will also be the lowest processing costs.

At the end of the year, there will still be 10 million 800 thousand tons / year of new PTA installations coming into operation in 2020. The supply of new capacity will inevitably increase the supply side of PTA, and at the same time, the supply structure will change. Next, the downstream polyester factories will gradually expand with the cash flow deficit area, and the time for polyester factories and weaving enterprises to leave will be further advanced. Late in the PTA supply and demand side is expected to weaken the environment, the future PTA storage pressure is larger. At the same time, the future PTA processing fee will also decrease the trend rate.