Overview:
The U.S. crude oil 08 contract made a sharp correction on Thursday and Friday, reaching a low of $38.54 during the week. It rebounded sharply on Friday night, with a weekly increase of only 0.74%, closing at the end of the day. Back above $40. The trend of the Brent 09 contract was basically the same as that of U.S. oil. It fell back to a low of $41.32 in mid-week, with a weekly increase of only 0.91%, and closed back above $43. The main domestic SC crude oil 08 contract fell sharply on Friday, closing at 292.1 yuan in daily trading, a sharp drop from last week, with a weekly decline of 1.91%.
Overseas epidemics have recurred. As of the reporting period, the cumulative number of confirmed cases in the United States reached 3.3556 million, with nearly 140,000 deaths. At the same time, the epidemic situation in Brazil, Russia, India, Spain, and Peru is not optimistic. Among them, the cumulative number of confirmed cases in Brazil has reached 184,100. Unknown pneumonia has emerged in Kazakhstan, the risk of domestic floods has increased, and macro risks have increased.
The weaving operating rate still fluctuates at a low level. The load of looms in Jiangsu and Zhejiang dropped slightly to 62%, and the texturing operating rate dropped slightly to 72%. The polyester load is temporarily maintained at 92%. Polyester products have once again accumulated a large amount of inventory. Inventory pressure has become prominent and filament losses have intensified. Polyester staple fiber has been in storage for five consecutive weeks to six days. Polyester factories have begun a new round of load reduction and production reduction, and it is difficult to maintain high loads. The total inventory of polyester raw material PTA is still at the highest level in the same period in previous years; the inventory of ethylene glycol port is about to expand, the arrival volume remains high, and shipments are neutral. Accumulation is still expected.
PTA:
The average price of PTA spot prices fell sharply this week , falling to 3,475 yuan/ton on Friday. The main processing gap of TA disk has narrowed this week, reaching 695 on Friday. One line of Hengli 5# with a capacity of 1.25 million tons has been put into production and is running at 95% load, and the other line is planned to be tested on the weekend. The operating rate increased slightly from last week, and the supply increase increased under the new production capacity base. The PX-NPT spread broke new lows again this week, reaching a minimum of $136, the lowest level in history.
Ethylene glycol:
Ethylene prices in Northeast Asia fell during the week After reaching US$800/ton, it remained stable. The latest ethylene glycol port inventory on July 6 showed a significant accumulation compared with the previous period. As of July 6, the MEG port inventory in the main port area of East China was approximately 1.463 million tons, an increase of 59,000 tons from the previous period. According to shipping reports, from July 6 to July 12, the total arrival volume of the four major ports is expected to be 326,000 tons, which is still an extremely high level. Shipments from the mainstream reservoir areas of Zhangjiagang and Taicang have been neutral recently, with the average daily average being around 12,000 tons/day. Port storage capacity problems may lead to a slow increase in explicit inventory and a slowdown in the accumulation of explicit inventory.
Cost and Profit
1 Raw material market
1.1 Crude oil, PX
Based on cfr Japan naphtha, naphtha (cfr Japan) this week Basically showing an upward trend, it was US$404/ton as of Friday. The U.S. crude oil 08 contract made a sharp correction on Thursday and Friday, reaching a low of $38.54 during the week. It rebounded sharply on Friday night, with a weekly increase of only 0.74%, and closed back above $40. The trend of the Brent 09 contract was basically the same as that of U.S. oil. It fell back to a low of $41.32 in mid-week, with a weekly increase of only 0.91%, and closed back above $43. The naphtha-Brent crude oil price spread has widened significantly this week as a whole compared with last week, reaching as wide as around 93 US dollars, and narrowed to 86 US dollars on Friday; the naphtha-WTI crude oil price difference has changed in line with the NPT-Brent price difference. It widened at most to around $113, and narrowed to $106 on Friday. The price of PX (cfr China) rose sharply to 548 yuan on Monday and then fluctuated and fell during the week, falling to $540 per ton on Friday. Since July 1, 2020, due to South Korea’s Hyundai’s slight expansion of 180,000 tons, Asia’s total PX production capacity has been adjusted to 60.28 million tons. Domestic PX production capacity remains at 25.03 million tons. The PX-NPT spread broke new lows again this week, reaching as low as $136 on Friday, the lowest level in history.
PX Asia’s operating rate rebounded slightly this week, rising 1.38% from the previous period to 76%; PX China’s operating rate rebounded sharply by 2.9% from last week to 84.10%.
2 Changes in costs and profits
The average spot price of oil-based ethylene glycol fell sharply during the week, falling to 3,390 yuan on Friday. The price is about 3,462 yuan, a sharp drop of 32 yuan from last week’s price center. The equivalent coal contract price is about 3,262-3,312 yuan. The chart is based on the nearby spot price – 3,250 yuan/ton. Coal-to-ethylene glycol losses have intensified for five consecutive weeks, with the highest regional losses around -1,300 yuan. Ethylene prices in Northeast Asia fell sharply to US$800/ton during the week and then stabilized. The cash flow loss from external production of ethylene to ethylene glycol decreased to around -$115. The cash flow loss from naphtha to ethylene glycol increased to more than -$60/ton. The cash flow loss of the methanol MTO production route increased significantly to about -1,060 yuan. All ethylene glycol process lines suffered overall losses.
Supply
1 Equipment maintenance status
From July 1, 2020, the polyester production capacity base has been revised upward to 61.1 million tons. The new devices include: Shenghong 250,000 tons (filament) and Yisheng 250,000 tons (bottle flakes) , Yijin 100,000 tons (short fiber), YijinChemical 200,000 tons (short fiber). A 200,000-ton unit in Fangxiang was opened on Wednesday this week, and some polyester units reduced production. Overall, the polyester load fluctuated within a narrow range. As of this Friday, the polyester load was at 92%. The polyester production and sales this week remained light in the remaining days except for the sharp price reduction promotion in the middle of the week, which reached 110%-120%.
Table 1: Recent major device changes in polyester:
data Source: CCF Zhongzhou Energy and Chemical Research Institute
PTA Domestic Devices – As the Hengli Phase 5 2.5 million tons PTA device was put into operation at the end of June, the PTA production capacity base was adjusted to 54.83 million tons. The maintenance plan of the 600,000-ton unit of Yangzi Petrochemical and the 2-million-ton unit of Yisheng Hainan has been postponed; the maintenance plan of the 325,000-ton unit of Sinopec Luoyang Petrochemical General Plant has been postponed to the end of July; the load of one line of Hengli 5# 2.5 million-ton new unit is 95%, and the load of another line is 95%. One line plans to test drive over the weekend.
Table 2: PTA’s recent major device changes:
Data source: CCF Zhongzhou Energy and Chemical Research Institute
Ethylene glycol unit: The load of the coal-to-ethylene glycol unit increased slightly, and the comprehensive operating rate continued to decline slightly. As of July 9, the overall operating load of domestic ethylene glycol was 58.25%. Among them, the operating load of coal-to-ethylene glycol is 41.72%.
Table 3: MEG’s recent major device changes:
Data source: CCF Zhongzhou Energy and Chemical Research Institute
Commissioning status of new devices: The first 200,000-ton unit of Xinjiang Tianye’s 600,000-ton coal-to-ethylene glycol unit and the 400,000-ton unit of Zhongke Refining and Chemical Co., Ltd. are already under trial operation stage, it is expected to be supplied to the market from July to August.
2 PTA Inventory
PTA factory inventory has remained stable at 5.5 days for six consecutive weeks. The inventory of PTA raw materials in polyester factories has remained stable at 10 days for two consecutive weeks. PTA’s converted social total inventory actually calculates the total of PTA inventory and polyester product inventory, which has rebounded sharply from last week – both PTA raw material inventory and polyester finished product inventory have accumulated this week, and the larger amount is reflected in polyester finished product inventory. On inventory. Absolute inventories are still at their highest levels over the same period in the past four years.
3 Ethylene glycol import and port inventory
The latest inventory of ethylene glycol ports on July 6 showed a significant accumulation compared with the previous period. As of July 6, the MEG port inventory in the main port area of East China was approximately 1.463 million tons, an increase of 59,000 tons from the previous period. According to shipping reports, from July 6 to July 12, the total arrival volume of the four major ports is expected to be 326,000 tons, which is still an extremely high level. Shipments from the mainstream reservoir areas of Zhangjiagang and Taicang have been neutral recently, with the average daily average being around 12,000 tons/day. Port storage capacity problems may lead to a slow increase in explicit inventory and a slowdown in the accumulation of explicit inventory.
Demand
1 Polyester
1.1 Polyester operating rate and equipment changes
Although polyester has announced a large number of maintenance plans this week, the overall load remains high. The weekly level was 92% as of Friday, the second lowest level just below the 2018 level. Among them, the operating rate of polyester filament dropped slightly by 0.5% to 77% compared with the previous period; the load of polyester bottle flakes decreased slightly by 0.3% to 77.30%; the operating rate of direct-spinning polyester yarn rose slightly by 0.7% to 94.30%. The operating rate of direct-spun polyester short yarn is still the highest level in the same period in history; the operating rate of polyester filament is still the second lowest level only higher than the same period in 2016; the operating rate of polyester bottle flakes is still the lowest level in the same period in history.
1.2 Polyester Inventory
Inventory changes of downstream polyester products: Polyester filament inventory has been fully accumulated: POY has accumulated inventory significantly from 1.8 days to 18.9 days, FDY has accumulated inventory slightly from 0.4 days to 19.3 days, and DTY inventory has accumulated significantly from 1.8 days to 29.6 days. . Polyester staple fiber has accumulated inventory for five consecutive weeks. The current inventory is 6 days, an increase of 1.5 days compared with the previous period. Inventories of polyester bottle flakes remain above last week’s 20-day inventory level. The inventory of polyester staple fiber has rebounded to a level above the equilibrium level for the same period in previous years, and the advantage of low inventory is no longer there; the inventory of polyester filament and polyester bottle flakes has maintained the highest level for the same period in previous years.
2 Terminal situation
The overall production of looms and texturing in Jiangsu and Zhejiang declined slightly this week. As of now, the operating rates of looms and texturing are 62% and 72% respectively. The operating rate of looms in Jiangsu and Zhejiang dropped slightly by 2%, still the lowest level in the same period in previous years. The comprehensive texturing operating rate fell slightly by 1%, the lowest level in the same period in history. Polyester filament was heavily promoted at a loss. Although terminal purchases were followed up, the intensity was relatively limited. The transaction volume only increased slightly on Wednesday, with the production and sales rate reaching 110%-120%. With limited orders, it is difficult to maintain the continuity of production.
The inventory days of gray fabrics in sample weaving enterprises in Shengze area have risen again since 5.25, and are currently 44.5 days, which is the highest level in the same period in the past. This year’s off-season started earlier than in previous years due to the impact of the epidemic, and inventories began to accumulate continuously at the end of May (in previous years, gray fabric inventories did not begin to accumulate until at least late June to early July). Against the background of the off-season, gray fabric inventories are still expected to continue to accumulate. The transaction volume of China Textile City started in late June and was not much different from the same period in previous years. This was mainly because the terminals were in the off-season during this period and the transactions were light. In the second half of the year, the peak season demand for the Gold, September and Silver Octobers may begin to be reflected in mid-August. There is also a risk of delay or a lack of peak season. Pay attention to the development of the epidemic.
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2 Terminal situation
The overall loom and texturing starts in Jiangsu and Zhejiang declined slightly this week. As of now, the operating rates of looms and texturing are 62% and 72% respectively. The operating rate of looms in Jiangsu and Zhejiang dropped slightly by 2%, still the lowest level in the same period in previous years. The comprehensive texturing operating rate fell slightly by 1%, the lowest level in the same period in history. Polyester filament was heavily promoted at a loss. Although terminal purchases were followed up, the intensity was relatively limited. The transaction volume only increased slightly on Wednesday, with the production and sales rate reaching 110%-120%. With limited orders, it is difficult to maintain the continuity of production.
The inventory days of gray fabrics in sample weaving enterprises in Shengze area have risen again since 5.25, and are currently 44.5 days, which is the highest level in the same period in the past. This year’s off-season started earlier than in previous years due to the impact of the epidemic, and inventories began to accumulate continuously at the end of May (in previous years, gray fabric inventories did not begin to accumulate until at least late June to early July). Against the background of the off-season, gray fabric inventories are still expected to continue to accumulate. The transaction volume of China Textile City started in late June and was not much different from the same period in previous years. This was mainly because the terminals were in the off-season during this period and the transactions were light. In the second half of the year, the peak season demand for the Gold, September and Silver Octobers may begin to be reflected in mid-August. There is also a risk of delay or a lack of peak season. Pay attention to the development of the epidemic. </p
