“Black Swan” events continue to ferment. The global market demand for chemical products has severely shrunk. Coupled with the violent fluctuations in the crude oil market, chemical product prices continue to plummet. It has even been in a state of loss.
The PX market cannot escape the bad luck. Last week, some PX manufacturers introduced device maintenance plans:
An 800,000-ton PX device in North China was shut down for maintenance on April 8. Previously, the operating load of the device was around 70%;
A 750,000-ton PX device in North China was shut down recently. The shutdown for maintenance is tentatively scheduled to last for about a week…
Of course, this is just the beginning. In the current low demand situation, it is not The later period of elimination will drive more PX manufacturers to conduct centralized maintenance.
In March, the PTA device experienced a wave of maintenance boom, involving a production capacity of nearly 10 million tons, so the PX device is undergoing maintenance this time. What’s the reason?
PX production capacity surges and may face oversupply
As the demand for PX in the domestic market increases, but the domestic PX production capacity is insufficient and the operating rate is low, the demand gap for PX is large. my country is the country with the highest market demand for PX in the world. In recent years, my country’s import dependence on PX has been on the rise. In 2018, China’s import dependence on xylene reached 61%, an increase of 14 percentage points compared with 2012.
To solve the self-sufficiency of the PX market, 2019 In 2020, with the commissioning of many large-scale refining and chemical units such as Hengli Petrochemical, Sinochem Hongrun, Hainan Refining and Zhejiang Petrochemical, the PX market has ushered in a concentrated launch of production capacity, and it is expected that PX will still have about 4.8 million tons/year in 2020. New equipment of the year. With the continuous commissioning of large-scale domestic refining and chemical integration projects, PX output has been released in a concentrated manner, which is far greater than the domestic net increase in demand.
PX market plummeted, prices and profits reached new lows
Since December last year, PX prices have It has been in a downward channel, especially due to the negative impact of the plunge in crude oil. The price of PX (FOB Korea) is currently around US$462. It can be said that the price of PX is now at a low level in more than ten years. Falling prices will inevitably lead to compression of profits. In the past year, PX’s profits have been in the red, and the losses have been expanding and fluctuating within a certain range. At present, the profit margin of PX has been reduced to around US$76/ton, while the profit of PX reached around US$115/ton in the same period last year.
Suppressed by the weak general environment, the impact of the pneumonia epidemic and the poor performance of crude oil, both profits and prices have fallen. Maintenance may be able to support prices to a certain extent. .
PX is expected to undergo maintenance, What impact will it have on the polyester market?
Form effective support for PTA prices
As the direct raw material of PTA, the price of PX plays an important cost support role for PTA. If PX has overcapacity, prices will naturally be restricted. For PTA, upstream costs continue to loosen, which naturally cannot form effective cost support. To a certain extent, it will inhibit the rise in PTA prices. For PX device maintenance, production capacity is restricted and price support can play a role in cost support for PTA.
Indirectly beneficial to polyester filament
Polyester filament as The price of polyester, an important component of the market, has been falling continuously in the past six months, breaking through the bottom price. In addition to being affected by the shrinking demand side, high inventory and increased production capacity, the ups and downs of the upstream polyester raw material market also have an important impact on it. As one of the most important raw materials for polyester filament, PTA contributes to the price of polyester filament. If the PX maintenance can boost the price of the PTA market, it will naturally benefit the polyester filament indirectly and inject a “stimulant” into its price.
Currently, the weaving market has entered a mode of having no business to sell, and the polyester market is also accumulating stocks on a large scale. In addition to shrinking demand, inventory is one of the most important factors dragging down the upward recovery of PTA prices. As of now, PTA social inventory is around 2.44 million tons, terminal demand is sluggish, and PTA social inventory levels continue to rise. Therefore, the demand for PTA also directly affects the trend of the PX market.
At the same time, polyester market inventories are also increasing. According to the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated around 33-44 days. The polyester inventory is high, and the demand for PTA will naturally decrease. PTA inventory continues to accumulate, and there may be large-scale maintenance in the future. risk. So for the PX market, the demand for polyester continues to slow down, but PX production capacity is still being continuously released, and equipment maintenance may be a better way to increase prices.
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