Macro and cost game: the production progress of new polyester equipment is the main variable

Judging from the increases and decreases in the first three quarters, the polyester chain sector has shown large fluctuations and obvious differentiation. PTA and short fiber are g…

Judging from the increases and decreases in the first three quarters, the polyester chain sector has shown large fluctuations and obvious differentiation. PTA and short fiber are generally stronger than ethylene glycol.

“The main performance of the polyester chain in the first three quarters is that the upstream of the industrial chain is strong but the downstream is weak, the supply side is tight and the demand side is excess, and the reality is tight and expectations are excess.” Jia Ruibin said.

Specifically, PTA is in a surplus cycle as a whole. Due to low profits and shortage of raw materials in the first three quarters of PTA, new production was limited and operating rates continued to be low. There was a structural mismatch of supply and demand during the year. In the first half of the year, inventory destocking continued, and the price difference between futures and current prices hit a record high. It is out of historical highs, the spot side is tense, and PTA presents a deep Back structure.

Ethylene glycol is also in a surplus cycle. A large number of productions were put into production in the first quarter. Port inventories rose to historical highs. Prices were suppressed to low levels by the market. Mainstream processes in the industry chain maintained losses. Maintenance of domestic equipment continued to be low and profits continued to increase. At the same time, Taiwan, China Part of the marginal costs of regions, Japan, and South Korea were squeezed out, and imports fell. The continued contraction of the supply side has led to an improvement in supply and demand after August, leading to phased port destocking. However, ethylene glycol as a whole is still in a surplus cycle. After the new equipment is put into production and returned for maintenance, it is still facing accumulation pressure.

In Jia Ruibin’s view, the difference between PTA and previous years is mainly due to the obvious shortage of raw material supply in the upstream of the polyester chain. This problem is mainly caused by the structural shortage of oil products after the Russia-Ukraine conflict. “Diesel tension in Europe has led to a decrease in gasoline output. After the United States entered the summer travel peak, gasoline inventories continued to fall to low levels, the octane number increased, the economics of aromatic oil blending improved, and the raw materials for PX upstream of PTA, such as reformed oil, toluene, and xylene, were Used for oil blending, the output of PX has declined, corresponding to an obvious shortage of raw materials for PTA. In addition, many suppliers have undergone maintenance and reduction, and PTA has experienced a phased supply and demand mismatch.”

The main difference between ethylene glycol and previous years is that low upstream profits began to improve supply in August, and prices continued to rebound.

“In the third quarter, polyester internal varieties fluctuated greatly and the trends diverged. This is related to the differentiation of demand for aromatic olefin products. Under the pressure of economic downturn, the overall chemical product demand and terminal performance deviated this year.” Jia Ruibin said that high-octane aromatic products such as Mixed aromatics, toluene, and mixed xylene can be used to blend gasoline, but olefins are not used to blend oil. The demand for aromatic products is better than that of olefins. The overall performance is that aromatics are stronger than olefins. Among them, PTA and styrene are aromatic chemicals, and ethylene glycol is an olefin product, so PTA, styrene and other products are stronger than ethylene glycol.

It is understood that the current contradiction and concern of PTA is the progress of the new PX device being put into production. Although the peak gasoline season has gradually passed, the recovery of PX supply is still slow, restricting the increase in PTA production. “Currently, a significant increase in PX supply still needs to wait for the new PX equipment to be put into production. The specific time may be from the fourth quarter to the end of the year.” Jia Ruibin said.

The main contradiction of ethylene glycol lies in the restart progress of coal chemical plants. The reporter learned that coal prices continue to rise, the amount of maintenance of ethylene glycol coal-making equipment is relatively high, and the operating rate is only about 30%. The original planned restart volume at the end of September was too high, which affected the balance in October. “The current high coal prices and the impact of the epidemic have led to the delay in the restart of some coal chemical industries, and it is expected to be in a tight balance state in October.” Jia Ruibin said.

Looking forward to the market outlook, Jia Ruibin believes that the current production progress of PTA’s new equipment is slow, and the start of PTA production during the year may be greatly restricted by raw materials. PTA will remain tight before the new device is put into production. After the device is put into production, there may be accumulated pressure on the inventory. Correspondingly, the near-end market may appear at a low level before the new device is put into production. Ethylene glycol will maintain an oscillating trend in the short term, and the accumulation pressure is expected to be relatively large in the medium and long term. The idea of ​​​​selling short on rallies can be considered.

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Author: clsrich