The demand for new devices to be put into production has entered the off-season
Affected by device maintenance and upstream cost support in the short term, PTA prices are expected to continue their rebound trend. However, gradually weakening demand limited the height of the rebound.
Upstream cost support still exists
Currently, the production profit of PTA’s upstream PX is at a historical low. As of December 9, the price difference between MX and PX was only US$80/ton. Profits shrank, the operating load of domestic PX devices fell back to 79.79%, while the operating load of international PX devices was relatively stable. PX manufacturing companies are in poor operating conditions and there is demand for price increases.
In addition, OPEC+ reached an agreement to partially extend production cuts, and the risk of the global crude oil market falling into serious oversupply again has been lifted. The United States is expected to launch a new round of stimulus policies in the near future, and global inflation expectations are rising. Not only that, geopolitical turmoil also plays a supporting role in oil prices. Oil prices are expected to continue to strengthen, thus boosting PX prices.
Supply is expected to increase in the later period
In addition to long-term shutdown devices, in mid-December, Fuhai Chuangzhuang’s 4.5 million tons/year device and Zhuhai BP’s production capacity The 1.1 million tons/year device is scheduled for maintenance, of which the shutdown time of the Fuhaichuang device is to be determined and the shutdown time of the Zhuhai BP device is two weeks. Correspondingly, the Zhongtai Chemical plant with a production capacity of 1.2 million tons/year, which was shut down in early October, is scheduled to resume production in late December. The Sichuan Neng plant with a production capacity of 1 million tons/year and the Reignwood Petrochemical plant with a production capacity of 1.4 million tons/year are currently in production. Operating at full capacity. In addition, Fujian Baihong’s new device with a production capacity of 2.5 million tons per year is expected to be put into operation by the end of the year. Overall, domestic PTA supply will decline slightly in the short term, but with the successive resumption of production of maintenance equipment and the launch of new production capacity, market supply pressure will continue to increase.
PX prices are at a low level, and with the recent increase in PTA prices, the operating conditions of PTA manufacturers have improved. As of mid-December, the average loss of PTA production companies was 30 yuan/ton, which was significantly less than the previous period. At present, the PTA processing fee has returned to 500 yuan/ton, which is at the normal level. As enterprises’ enthusiasm for production increases, their willingness for maintenance will inevitably decrease.
Weaving usually shuts down during the Spring Festival holiday
The terminal weaving industry shuts down a large area during the Spring Festival every year, and the start-up load gradually declines after New Year’s Day. At present, except for some companies that have received orders after the Spring Festival, most companies still mainly produce winter clothing fabrics. Once winter clothing orders are digested, the subsequent seasonal decline in terminal weaving loads will be difficult to change.
Since the fourth quarter, polyester filament inventory has been relatively stable and at a normal high level. As terminal loads decline, polyester companies need to bear certain destocking pressure.
Forecast of the market outlook
With the terminal seasonal off-season approaching and the launch of new production capacity, the subsequent supply and demand contradiction is expected to intensify, but due to the PX processing fee Boosted by low prices, strong international crude oil prices, and short-term maintenance of equipment, the PTA market is cautiously bullish, and the height and time of the rebound are limited. </p
