2019 PX Quotes "Diving", 2020 PX Profit Loss Or Normal.

1. Price trend

In 2019, the domestic market price of para xylene decreased sharply, the average price was 8500 yuan / ton at the beginning of the year, the average price at the end of the year was 6700 yuan / ton, and the year-round decline was 21.18%, which can be seen from the price chart. Although glycol production capacity dropped less than expected in 2019, the pressure of excess supply and demand of ethylene glycol was gradually highlighting, and the spot price of glycol was low. Since 2019, the spot price of ethylene glycol has fluctuated between 4215-5420 yuan / ton, and the external price has fluctuated between 512-660 yuan / ton.

In the first half of 2019, the price of ethylene glycol continued to decline because of the High East China main port inventory between 78.5-143.6 million tons and loose liquidity. In the second half of the year, the price of ethylene glycol rose somewhat, but the margin was limited. This was mainly due to the obvious decline in the load of domestic ethylene glycol in the second half of the year, the acceleration of port delivery speed, and the stabilization of ethylene glycol under the storehouse, but the overall rebound height of ethylene glycol was still suppressed by the commissioning of Rongxin chemical and Hengli petrochemical.

Two, market analysis

The upstream raw materials will yield profits, and downstream demand will be flagging. Polyester prices will continue to move downward. As of November 16, 2019, the price of PET chips and PET bottles was 5900 yuan / ton and 6375 yuan / ton respectively. The price of polyester filament POY/DTY/FDY was 6850 yuan / ton, 8550 yuan / ton and 6925 yuan / ton respectively, and the price of polyester staple fiber was 6733 yuan / ton. The price of polyester products has dropped significantly since 2019, which is mainly due to the continuous decline of the price of PTA in the upper reaches. Thanks to the Sino US trade friction and the slowdown in domestic consumption, the boom of the terminal weaving industry has declined significantly, and the price of polyester links has been weak and prices have been innovating repeatedly.

The domestic new plant put into operation, resulting in the domestic PX self-sufficiency rate rising sharply, compared with the self-sufficiency rate of 40% in 2018 to 52%, but the PX external price is also the most important factor affecting the domestic market price of para xylene.

Combined with the annual price chart of domestic market and the price chart of PX external market, the price trend of PX market can be divided into two stages: the first stage is from the beginning of the year to the end of March, and the price trend of PX market is rising; the second stage is the stage of the beginning of April, and the price of PX market is decreasing gradually.

The first stage was at the end of -3, the price trend of domestic PX market gradually increased, and domestic prices rose from 8500 yuan / ton to 9000 yuan / ton in March.

From the point of view of product supply, domestic PX operation rate is more than 8, domestic equipment starts normal operation, and domestic p-xylene market price trend rises 5.3%. The price of PX external market rose from $1000 / ton CFR to Taiwan $100 / ton up to 1100 US dollars / ton CFR Taiwan. The rise in external market price is a major support for the domestic p-xylene market, and domestic p-xylene market prices are rising.

Judging from the industrial chain, the first phase of the crude oil market price rose sharply, from 45 US dollars per barrel at the beginning of the year to 60 US dollars / barrel. The sharp rise of crude oil price will bring favorable cost support to the domestic p-xylene market, and the domestic p-xylene market price trend is rising. The price trend of the downstream PTA market rose slightly, and the PTA market price rose by 8%. In addition, the first quarter was the stocking stage of the textile industry, and the downstream textile industry was actively stocking the upstream demand.

The second stage is from the beginning of April to the end of the year. The price of PX market has gradually declined, and the domestic market price has dropped sharply from 9000 yuan / ton to 6700 yuan / ton, or 25.5%. The domestic market price of p-xylene has declined sharply, mainly due to the large increase in domestic supply, and no obvious improvement in downstream demand. In the second stage, the domestic PX operation rate is less than 7. The Tenglong aromatics plant has started a 800 thousand ton production line, the domestic Hongrun chemical industry has added 600 thousand tons, the Hainan refinery phase two has increased the capacity of 1 million tons, the Hengli Petrochemical has increased 4 million 500 thousand tons, started 2 million 250 thousand tons, the Yangzi Petrochemical PX plant has been running normally, the Jinling Petrochemical plant has run smoothly, the Qingdao Li Dong plant has been running at full capacity, the Qilu Petrochemical plant has run normally, and the Urumqi petrochemical plant started at about 5 percent, the domestic supply of p-xylene has risen sharply, and the domestic p-xylene market price has continued to decline.

Considering the overall capacity of Asia, PX capacity is in the stage of supply exceeding demand, and PX market prices continue to decline. The price of PX's external market has been declining due to the impact of crude oil. The price of PX's external market has dropped from 1100 US dollars / ton to 800 US dollars / ton CFR Taiwan. The price of PX's external market has dropped by 300 US dollars / ton. The price of external market has a certain guiding function for domestic p-xylene market, and its dependence on xylene is still high.

In addition, the price of the downstream PTA market has dropped significantly, and the domestic PTA market price has dropped from 6600 yuan / ton to 5000 yuan / ton, the decline rate is as high as 26%, and the operating rate has also risen to varying degrees. The PTA operation rate is about 90%, the polyester start up rate keeps about 90%, and the textile and start-up rate of Jiangsu and Zhejiang is about 75%, and the downstream market continues to decline, which brings some bad influence to the upstream PX market.

Conclusion:

The cost side of ethylene glycol: Based on the judgement that the crude oil price has "bottom" in 2020 and the overall trend of oscillation, we believe that the cost side is difficult to raise the price of ethylene glycol. For ethylene glycol, the market is concerned about the cost of its cash flow. In 2020, with the expectation of decentralized production capacity, it is estimated that the market will continue to test the cost of the production of ethylene glycol cash flow around 4000-4100 yuan / ton.

Glycol supply side: ethylene glycol production capacity in 2019 is much worse than expected, and the planned production is concentrated in the four quarter. In 2020, the timing of ethylene glycol production capacity was more dispersed. Almost every quarter there was pressure on new capacity. If production capacity was put on schedule, the supply pressure of ethylene glycol would increase sharply. The supply side proposes to pay attention to the expected revision of production capacity which is less than expected.

The demand side of ethylene glycol: in 2019, when the upstream price rose and the terminal demand was flagging, the production rate of polyester production was slower. In 2020, although the cash flow of polyester will be slightly improved in spite of the decline in the price of PTA, the end of the textile and weaving industry is expected to remain bland, with limited demand for polyester. According to the current capacity delivery plan, the speed of polyester production has slowed down compared with the previous two years, and the growth rate of capacity is slower than that of supply.

Ethylene glycol stock end: under the assumption that the overall supply of ethylene glycol is oversupplied and will continue to suffer from the impact of price competitiveness overseas, we believe that ethylene glycol will become a repository in 2020, and the rhythm of the storehouse will decide the price trend of ethylene glycol to a large extent.

To sum up, in 2020, ethylene glycol faced enormous pressure of production capacity at the supply side, and the demand for follow-up was insufficient. Moreover, the competitiveness of China's oil glycol was far inferior to that of ethylene glycol in the Middle East and other places. Under the uncertainty of capacity delivery, we expect that the import shock is still in existence, and there is a large probability of storage in the port.

2020 PX forecast:

Under the pressure of huge production capacity, ethylene glycol is expected to have excess supply and demand in the long run. From a long-term perspective, the price of the glycol will continue to test the cost of the cash flow of ethylene glycol. It is preliminarily predicted that the price range of ethylene glycol in 2020 will fluctuate to 4000-5000 yuan / ton.

Despite the increase in demand for new installations and production of PTA enterprises in Zhejiang next year, including the 4 million ton / year PX plant of the Zhejiang Petrochemical Company, it has become the second largest PX leading enterprise in China, and the PX self-sufficiency rate has gradually increased, and domestic supply and demand has improved. However, the overall supply of Asia's PX has been oversupplied. There are enormous pressure on the export of large PX countries such as Japan and Korea. It is very likely that they will sell to the domestic market and compete with domestic enterprises, and the new PX devices will be mostly equipped with the PX-PTA- polyester industry chain. The profits of the industrial chain have been shifted from PX to PTA. Even if the production losses of the PX will remain high, the 2020 will still maintain a weak pattern, and even low profits or even losses will become the norm. With the release of new domestic capacity, the supply continues to grow. (source: business community, founder medium term futures)