New Production Capacity Put Into Production PTA Market Continued To Rise, Lack Of Power

Xinfengming announced today (October 19) that with the joint efforts of all employees of the company, the second phase of Dushan Energy Co., Ltd., a wholly-owned subsidiary, has put into operation an annual output of 2.2 million tons of green intelligent PTA project through the early stage of equipment installation, single machine commissioning, linkage commissioning, cold commissioning, hot commissioning and material commissioning. The PTA phase I plant with an annual output of 2.2 million tons has been put into operation on October 30, 2019.

This is a major measure for xinfengming to extend the industrial chain upstream, complete PTA self-sufficiency, further reduce the cost of main business, and enhance the comprehensive strength of the company. Also further enhance the company's profitability, competitiveness and anti risk capabilities, improve the comprehensive utilization of resources, consolidate the company's competitive advantage of polyester filament products.

According to the statistics of the business agency, the domestic PTA capacity increased rapidly from 2010 to 2014, while the period from 2015 to 2016 experienced a period of de capacity and entered a stable period. It is estimated that PTA will usher in a new round of production capacity release cycle from 2020 to 2022. By the end of 2022, PTA has a total capacity release plan of 29.3 million tons. The new capacity mainly comes from the raw material matching of downstream leading enterprises and the expansion of PTA's main suppliers. The era of PTA's high boom will come to an end.

　　 Statistics of domestic PTA new capacity in 2020 (unit: 10000 tons)

Since the production peak of PTA and petrochemicals, the total production capacity of PTA has increased by 2.25 million tons, including 6.15 million tons of PTA and 2.5 million tons of PTA put into production in 2020. It is estimated that Fujian Baihong 2.5 million ton unit will be put into operation in October in the fourth quarter, and the 3.3 million ton unit of Sinopec is planned to be put into operation near the end of the year. If the unit is put into operation smoothly, the production capacity may reach 66.855 million tons by then, which will greatly increase the domestic PTA supply pressure, and the pattern of excess supply is still severe, which will bring pressure on the market price. According to the price monitoring of the business agency, as of October 19, 2020, the average price of PTA spot market in China was 3442 yuan / ton, a year-on-year decrease of 31.67%.

From the perspective of xiayibo, the price of PTA terminal has risen in the near future, as well as PTA's demand for large-scale maintenance. However, the new production capacity feeding has a certain impact on the market. In addition, the production and sales of polyester in the downstream have fallen down as a whole. Only relying on the high production and sales of polyester staple fiber can not boost the market. It is expected that PTA market will continue to rise, with insufficient power.