PTA: Tight Supply And Demand Push Up The Period Price, And The Production Pressure Of The Plant Is Large

abstract

In February, crude oil continued to pull up under various favorable effects, and the chemical industry plate also followed the rise, with polyester series taking the lead in this round of rise. The main reasons are as follows: during the Spring Festival, some PX stoppages were caused by the earthquake in Japan, PX quotation in Asia was strong, PTA processing difference was once compressed to below 200 yuan / T; since October last year, ethylene glycol import volume continued to decline, cold wave in the United States in February led to short-term shutdown of some units, import end "shortage" expectation was strong in recent period, import source quotation was high, basis continued to strengthen; polyester opened Although the load dropped slightly during the Spring Festival, the load recovered quickly after the festival, and the average monthly operating rate was more than 80%, which was the highest level in the past years.

Looking forward to the future, with the rise of international crude oil prices, OPEC gradually relaxed and reduced production, and international crude oil production increased; the cold wave in Texas gradually weakened, and the U.S. crude oil production affected by the cold storm will recover in the next few weeks. The factors supporting the continued upward trend of crude oil weakened, and it is expected that the space for crude oil to continue to rise is not large. In terms of supply and demand, PTA and ethylene glycol still have a large number of units put into operation in the first half of the year, and the factory will increase the price rise space in the suppression period when the sales volume is high.

In terms of operation, medium and long-term long-term orders are mostly high-end and profit-making, pay attention to the trend of oil price, and pay attention to the trend of downstream inventory and device production in intraday interval trading.

1、 Fundamental analysis

1. Upstream raw materials

In February, the international oil price continued to rise, with a cumulative increase of more than 15% in February. At present, the current situation is relatively strong. From the point of view of the whole month trend, the trend at the beginning of the month is relatively gentle, the intra day fluctuation increases after the middle and late ten days, and the average line presents a continuous upward trend. On the supply side, Saudi Arabia, the world's largest oil exporter, said it would voluntarily reduce production by 1 million barrels / day in February and March, boosting market confidence; the severe cold weather in Texas, the largest oil producing state in the United States, led to the shutdown of oilfields in the state. According to relevant reports, the cold wave affected about 40% of the crude oil production in the United States. On the demand side, the heating demand of the United States in winter increased, and the rising oil price led to strong international buying, increased export volume and decreased API crude oil inventory in the United States. On the economic front, the House Budget Committee approved the $1.9 trillion bill announced by the democratic party last week with 19 votes in favor and 16 votes against on 22 US Eastern time. In terms of geopolitics, IAEA Director General Grossi met with Iranian officials in Tehran on the 21st, and the two sides reached a temporary technical agreement with a maximum of three months. The gap between the United States and Iran appeared to bridge the gap.

On the whole, OPEC + continued to implement the production reduction agreement, but due to the limited vaccine production capacity, the improvement of global epidemic situation is relatively limited, and the increase of crude oil demand is not sustainable. Moreover, OPEC plans to restore some production in the future, and the pressure on crude oil is gradually emerging. Follow up attention was paid to the results of the implementation of the 1.9 trillion rescue plan of the Biden government, as well as the development of the epidemic situation in Europe and the United States.

In February, the rise of PX market in February was slow first and then rapid, and the price increase was basically synchronous with that of crude oil. In the middle and late February, the earthquake in Japan led to the short-term shutdown of several PX devices and the short-term shutdown of PX devices in Northeast Asia, pushing up the price of PX imports. As of February 23, (PX) CFR China's monthly offer was $839.33/t, up 15% from the beginning of the month; FOB Korea's offer was $822 / T, up 16.36% from the beginning of the month. Naphtha rose more slowly than Px, and PX naphtha price increased slightly compared with the beginning of the month. As of the 23rd (PX) FOB Korea - (naphtha) CFR Japan was at $222.25/t, up $32.89 from the low at the beginning of the month. The settlement price of Sinopec PX in February was 5700 yuan / ton, up 700 yuan / ton compared with January. The PX listing price of Sinopec in February was 5610 yuan / ton, up 420 yuan / ton compared with January. In December 2020, China's import volume of PX in December 2020 was 1130325.514 tons, the cumulative import volume was 13861054.582 tons, the average import price in December was 547.492 US dollars / ton, the cumulative average import price was 547.492 dollars / ton, the import volume increased by 12.492% month on month, and the import volume decreased by 60.607% year on year.

In February, ethylene ran smoothly at the beginning of the month and rose slightly at the end of the month. As of February 23, the CFR Northeast Asia price of ethylene was 981 US dollars / ton, up 75 US dollars or 8.31% compared with the beginning of the month.

2. Supply status

The operating rate of PTA plant in February was lower than that of last month. The average operating rate of February was around 85.63%, which was 0.73% lower than that of last month. PTA output was 4.2 million tons, which was 5.87% lower than that of last month. In addition to Jialong petrochemical, Pengwei petrochemical and Tianjin Petrochemical are still in long-term shutdown, most of the units are in healthy operation. In February, the production capacity of the 4.5 million ton unit of fuhaichuang was overhauled on December 23 and restarted on January 21, with the current load of 90%; the 650000 ton unit of Yangzi Petrochemical Company was reduced to 80% on February 1 with the recovery time to be determined; the 2.2 million ton unit of Jiangyin Hanbang unit was shut down for maintenance on January 6, with the restart time to be determined. Next month, several large units are scheduled to be overhauled, and Eason Hainan, Pengwei petrochemical and Hengli Petrochemical are scheduled to overhaul, with a total capacity of 5.2 million tons. Fujian Baihong plant line a has produced qualified products on January 25, and line B plans to put into operation on February 3. The total capacity of the two production lines is 2.5 million tons / year, and the domestic capacity base is increased by about 0.42%. Honggang Petrochemical phase II was put into operation in the second quarter, involving a production capacity of 2.2 million tons / year, and the unit maintenance loss increased in March, and the PTA supply side improved slightly.

According to the customs statistics, in December 2020, China's import volume of PTA in the month was 18479.73 tons, the import amount of that month was 8.018 million US dollars, the average import price of that month was 433.55 dollars / ton, the cumulative average import price was 459.40 dollars / ton, the import volume rose 15.01% month on month, and the import volume fell 69.27% year on year. According to customs statistics, in December 2020, China's export volume of PTA was 139702.51 tons, the export amount of that month was 60.1412 million dollars, the average export price of that month was 430.49 dollars / ton, the export volume rose 41.48% month on month, and the export volume increased 130.90% year on year. The reduction of import volume and the decrease of net import on a month on month basis show that China's PTA is gradually getting rid of imports and the dependence on imports is declining.

3. Ethylene glycol supply

In February, the average domestic ethylene glycol operating load was about 64.91%, and the monthly output was about 857500 tons. Among them, the starting load of non coal to ethylene glycol is about 70.13%, and the monthly output is about 586200 tons; the starting load of coal to glycol is about 55.85%, and the monthly output is about 271200 tons. (in addition to the long-term shutdown of several Yongjin chemical plants and Xinjiang Tianye plant, the short-term repair devices in February include: Xinhang energy plant was overhauled on January 2 and restarted on January 10; Tongliao Jinmei was overhauled on January 19 and restarted on January 28; Dushanzi Petrochemical Company was overhauled on January 1, and the restart was pending; Fude energy was overhauled on January 18 and restarted on January 31. Up to now, the overhaul in February involves 3.96 million tons of production capacity, and the monthly loss is estimated to be 266500 tons, which does not include small-scale conversion of oil to EO and load reduction of coal-based system. Many subsequent units plan to increase the load, and Jianyuan coal chemical and Hubei sanning, which were postponed in early January, are expected to be put into operation next month. As for ports, as of February 22, 2021, the total ethylene glycol port inventory in the main port area of East China totaled 616000 tons, and the decline rate of ports slowed down. Affected by the cold wave in the United States, the ethylene glycol plant in the United States has been shut down in a large scale. The MEG plant of 828000 tons / year in the United States is still in shutdown. The ethylene plant is planned to be restarted before and after March 8, and the ethylene glycol start-up time is in the first ten days of March. At present, the 360000 T / a MEG unit of South Asia Line 2 in Taiwan has been restarted normally, with an operating load of 80-90%. In February, the trend of ethylene glycol in Asia was stronger, the price difference between Asia and Europe was repaired, and the Middle East source of goods was encouraged to allocate to Asia, and the subsequent Asian European re export arbitrage phenomenon may be reduced. In the long run, imports from the United States and Saudi Arabia are expected to recover or continue to increase, and domestic production continues to rise. It is expected that the shortage of ethylene glycol supply in the second quarter will ease.

In December 2020, the import volume of ethylene glycol in China was 551144.11 tons, the cumulative import volume was 10548005.28 tons, the monthly import amount was 271336300 US dollars, the cumulative import amount was 4985.924 million US dollars, the average import price of that month was 492.31 dollars / ton, the cumulative average import price was 472.69 dollars / ton, the import volume fell by 11.84% month on month, the import volume decreased by 40.16% year-on-year, and the cumulative import volume was the same as last year The period was up 5.92%.

4. Quotation of contract goods

In terms of PTA contract goods, the PTA settlement price of Sinopec in February was 4200 yuan / ton, which was 3300 yuan / ton higher than the settlement price of last month. The listing price in March was 5200 yuan / ton, an increase of 1000 yuan / ton over the previous month.

In terms of ethylene glycol contract goods, Sinopec's ethylene glycol settlement price in February was 5500 yuan / ton, an increase of 790 yuan / ton compared with the settlement price of last month. The listing price of ethylene glycol in March was 6500 yuan / ton, 1300 yuan / ton higher than that of last month.

In February, the average monthly quotation of PTA in East China market was 4103 yuan / ton, which was 231 yuan / ton higher than that of last month. The average monthly quotation of ethylene glycol in East China market was 5190 yuan / ton, which was 663 yuan / ton higher than that of last month. As of February 23, (PX) CFR China's monthly quotation was $839.33/t, up 15% from the beginning of the month; the average monthly processing difference of PTA in February was 327 yuan / ton, down 96 yuan / ton compared with the previous month. The gross profit of coal to glycol market is 1511.5 yuan / ton; methanol to glycol market is 365.27 yuan / ton; ethylene to glycol market is 113 dollars / ton; naphtha to glycol market gross profit is 156.79 dollars / ton.

5. Polyester and terminal conditions

In February, the output of polyester industry in February was 3.93 million tons, down 14.34% month on month. February coincides with the Spring Festival, and the polyester operating rate has been reduced. The minimum polyester load recorded in the section is 78.2%, which is significantly higher than that of last year. In addition, several units were put into operation last year, and the actual output of the section has reached a record high. Looking forward to the future, the terminal weaving has been resumed orderly, and the capacity load has increased to 62.32%. The order preparation in summer starts gradually, and the subsequent polyester consumption is optimistic. It is expected that the average polyester load in March is expected to return to 90%. In terms of categories, the short fiber and filament load decreased less in February due to the profit side boost, and the bottle piece load decreased slightly.

In the middle and late February, affected by the rise of crude oil, the production and sales of downstream polyester products were in large volume, and the inventory of staple filament was further reduced. However, due to the characteristics of one-time purchase and multiple pick-up in the mill, and the factors that the inventory is not digested, the actual social stock of staple fiber is still relatively abundant. Crude oil prices continued to rise, while dual raw materials rose in a narrow range. With the increasing cost pressure of polymerized pet, the quotation of some polyester filament models increased, and the cash flow improved slightly. As of February 26, the profit of FDY was 449.23 yuan / ton, POY was 149.23 yuan / ton, and DTY was 225 yuan / ton. In February, the market price of polyester bottle chip in East China rose sharply. The average profit of polyester bottle chip manufacturers was 357.21 yuan / ton, which was 243.17 yuan / ton lower than that of last month, and the profit space was enlarged. In the future, with the advent of summer in the northern hemisphere and the peak season of beverage consumption, beverage manufacturers are expected to make inquiries and stock up, and the profit of bottle slices is expected to increase.

On the whole, the production and sales of staple filament are in large volume, and the terminal weaving operation rate is gradually rising, and the demand for polyester raw materials is enhanced. The market has a good expectation for the follow-up "Jinshan Yinsi", and the market is in short supply due to the purchase of some goods. Strong downstream demand, polyester enterprises have replenishment demand for raw materials, good glycol and PTA prices.

2、 Price structure

From the basis trend chart, as of February 25, PTA basis in February strengthened from - 160 to - 130, and the forward price gradually returned to the spot price. The base difference of ethylene glycol was greatly strengthened in February. Due to the decrease of import sources and the boost of cost, manufacturers were reluctant to sell. The spot supply was tight and the spot rise was strong. The price difference of ethylene glycol was strengthened from 210 to 530. In the later stage, the load of domestic units increased, so it is recommended to operate in the period of sale and purchase. Pta05-09 contract operates with - 90 as the center, and the front line fluctuates. At present, the long-term supply is weak. It is suggested to intervene in the vicinity of the price difference (- 90) with the target of (- 60). Affected by the recent supply of ethylene glycol, the recent contract has greatly increased the forward contract. The cross variety contract of ethylene glycol PTA has risen sharply. At present, it is under pressure around 1100. In the later stage, ethylene glycol is driven by profits and the restart volume is large. However, PTA has strong cost support in the low profit state. It is suggested that the follow-up empty eg multi TA operation is appropriate.

3、 Summary of views

In terms of raw materials, crude oil in February continued to hit a new high since the outbreak, boosted by OPEC + continued to reduce production and Saudi Arabia increased production beyond the quota. However, at present, there is no turning point in the epidemic situation, and the recovery of crude oil demand is relatively slow. It is rumored that OPEC will open partial production restriction after April, and there is a great pressure on the price. Affected by the shortage of their own supply, PX and ethylene have a rapid rise in the middle and late February. At present, the short-term shutdown device is planned to restart, and the price rise is expected to slow down.

In terms of PTA supply, in addition to a small number of plant rounds, the operating rate in February remained nearly 90%. After Fujian Baihong was put into operation, the domestic production capacity was further increased. In March, Huabin petrochemical and Hengli Petrochemical planned to shut down for maintenance. In addition, Yisheng new materials phase II plant was delayed to be put into operation in the second quarter, so the overall supply pressure improved month on month. In terms of ethylene glycol supply, the ethylene glycol start-up load gradually increased to 70% in late February. In the early stage, the unit was restarted to increase the load, and part of the production capacity of EO was planned to return to eg. At the end of last year, the start-up of the units was delayed, and sanning and Chenzhou chemical industries in Hubei Province were put into operation to increase the load, and the domestic production load was gradually increased, and the supply gap caused by the decline of peripheral supply was gradually repaired.

In terms of demand, the polyester production rate will be reduced to 70% level in February, and the negative level of polyester in Spring Festival will be higher than that in previous years. In terms of terminals, as of February 25, the comprehensive start-up rate of chemical fiber weaving in Jiangsu and Zhejiang regions was 62.23%, with a decrease of about 20 percentage points on a month on month basis. Migrant workers returned home early and the operating rate increased rapidly.

In a word, PTA's processing profit is still near the cost profit and loss line, and the crude oil end cost support is relatively strong. The profits of some domestic ethylene glycol routes have turned positive, and the domestic load is expected to continue to increase. Both in the crude oil cost side to boost the next term price rapid rise, is expected to be a small correction next month. From the perspective of callback strength, ethylene glycol callback is even worse, and more PTA empty glycol trading opportunities can be focused in the later stage. Intra day trading focused on PTA operating rate changes, ethylene glycol port inventory changes.

In terms of operation, the unilateral TA05 contract focused on 4600 first-line support in the short term, observed the oil price trend and the recovery of terminal textile, left the site temporarily with multiple orders, and then connected after the callback was fully sorted out. Eg05 contract broke through all pressure levels since its listing in February, reaching a new high. At present, the ethylene glycol monthly line KDJ shows that it is overbought, and is expected to callback in the near future. The top authorities should pay attention to the 6100 pressure and domestic production, and it is appropriate to distribute the products in high and short supply.

For arbitrage operation, the current range of ta05-eg05 is relatively strong and volatile, so it is suggested that the arbitrage contract is suitable to make up for the short when the price difference returns. It is suggested that the ta05-eg05 contract enter the market near 1200 with the target of 750 and stop loss of 1350.

[risk factors]

(1) crude oil continued to run in a strong way

(2) the reversal was better than expected

(3) the inventory of downstream decreased rapidly