Starting from the second half of 2014, PTA’s cost side collapsed as crude oil prices continued to plummet, and its sales price also experienced a sharp decline. In 2015, PTA prices began to fluctuate and bottomed out. In 2016, the center of gravity of PTA prices slowly increased, entering the last month. In the second half of the month, PTA began to oscillate and consolidate, maintaining stable prices. Xiaosha believes that PTA will most likely continue to maintain an oscillating pattern before the Spring Festival, and is optimistic about the rising market after the Spring Festival. The reasons are as follows:
Reason 1: International oil prices are relatively optimistic in the medium term, and the implementation of production reduction has achieved initial results!
It has been more than 10 days since the OPEC production reduction agreement officially came into effect. From the current news, it seems that the implementation process of production reduction by OPEC member countries is generally good. Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar are all implementing production reduction agreements. Saudi Arabia’s crude oil production has dropped by at least 486,000 barrels/day to 10.058 million tons/day since January. Angola and Algeria have notified oil companies to cut crude oil production to fulfill their production reduction commitments. Venezuela has implemented its commitment to reduce production by 95,000 barrels per day. Although Iraq’s exports hit a record high of 3.51 million barrels per day in December last year, the country has cut production by 160,000 barrels per day since early January this year, which is more than three-quarters of the promised production cut of 210,000 barrels per day. At the same time, as the main representative of non-OPEC production cuts, Russian crude oil production has reduced by about 130,000 barrels/day from the post-Soviet era record high of 11.25 million barrels/day in October 2016, exceeding the production cut this month by at least 50,000 barrels/day. initial target for the day.
Overall, the current production cuts by oil-producing countries are basically in place. Even if the oil-producing countries only complete 80% of the agreed production cuts, the crude oil market will return to balance in early 2017. In the medium term, the center of gravity of crude oil operations is expected to be US$55-60/barrel.
Price trends of PX and Brent crude oil futures in 2016 (unit: USD/barrel, ton)
Reason 2: PX is in the darkness before dawn, and the later needs are basically balanced!
At present, PX is running relatively smoothly, and the PX-naphtha price difference is currently stable at around US$350/ton, which is at its lowest level since 2016. This is mainly related to the recent strength of upstream naphtha and India’s trust in the opening of a 2.2 million-ton PX device. However, starting from late March, Asia’s PX equipment will undergo maintenance on a large scale. At present, the volume of Asia’s PX maintenance in the second quarter will be around 8.2 million tons, accounting for 19% of Asia’s total PX production capacity. The maintenance volume in 2015 and the second quarter of 2016 was only about 4.5 million tons. Excessive maintenance of PX equipment will definitely tighten the supply of PX significantly. On the other hand, the 1.4 million-ton PTA units in Far East and the 900,000-ton PTA plant in Pengwei are expected to restart around April, and the stocking of raw materials will exacerbate the shortage of PX. We are optimistic about the cost support provided by PX to PTA after the Spring Festival.
PX and naphtha price trends in 2016 (unit: US dollars/ton)
Reason 3: PTA supply pressure is not great and prices are still supportive!
There were not many PTA equipment maintenance in January. It is expected that the accumulated PTA inventory in January will be around 200,000 tons. The overall supply and demand performance is poor. However, it can be clearly seen recently that as long as PTA falls, polyester factories will participate in replenishment. In addition, mainstream suppliers have recently been actively repurchasing warehouse receipts and spot goods, and price support still exists. According to the currently announced maintenance expectations, Yisheng Ningbo’s 2.2 million tons unit is scheduled to be overhauled in early February. Referring to the maintenance situation of downstream polyester during the Spring Festival this year, the pressure on inventory accumulation in the PTA market from January to March is not great. Judging from the expected resumption of production of the three existing units, Xianglu does not have a clear resumption date. The possibility of resumption of production in the first half of 2017 is low, while Far East and Pengwei may have to wait until after May to have stable output. , does not rule out the possibility of continued postponement, that is to say, at least before May, there will be little pressure on PTA supply.
Reason 4: Although the sales situation is poor, the profits of the polyester factory continue to be maintained!
Judging from the operation situation of downstream polyester, polyester efficiency continued to maintain a good momentum in January. Although inventory levels have increased, absolute inventory is still at a low level. The average inventory days have dropped by half compared with the same period last year. POY, FDY, and DTY are still respectively. Control it at around 10 days, 8 days, or 15 days. According to statistics, the production capacity involved in polyester maintenance during this year’s Spring Festival will be around 5.5 million tons, accounting for about 10% of all polyester production capacity, down 21% year-on-year. This is related to its better profits. Judging from the new device commissioning plan, in the first and second quarters of 2017, three sets of bottle flakes with a total capacity of 1.15 million tons and one set of melt production capacity of 500,000 tons are expected to be put into operation. The increase in demand will slow down the pressure on PTA stock production capacity. Moreover, the timing of the launch of polyester production capacity is earlier. Although starting next week, polyester factories will enter the Spring Festival holiday mode one after another, and demand will gradually weaken. However, judging from the intensity of shutdowns this year and the launch of new equipment in the later period, we are still optimistic about the impact of post-holiday demand on downstream polyester factories on PTA prices. .
Price trend of polyester products in my country in 2016 (unit: yuan/ton)
Therefore it is clearPTA prices will continue to be neutral in 2020, and there is a greater possibility of rising prices after the holiday! But the magnitude will depend on how much crude oil prices rise.
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