Introduction: Entering October, international crude oil prices hit a new high for the year and several large-scale equipment on the PTA supply side were temporarily shut down, causing the PTA spot market price to rise sharply. However, the increase in the price of raw material PX is limited, so as of October 11, the PTA processing fee has risen to 876.32 yuan/ton, a year-on-year increase of 146.85% from the previous month. Affected by insufficient terminal demand, coupled with the return from the holidays, large-scale equipment in the PTA market is expected to restart. There is an upward trend in supply. In the short term, the cost side will still support the PTA market, but the increase in supply, demand and processing fees may drag down the PTA market.
Comparison of PTA operating rate and processing fee
Source: Longzhong Information
In the PTA industry, there is no doubt that processing fees are king. The overall direction of the PTA market in the first and second quarters of 2021 will follow the trajectory of crude oil, and PTA prices will rise along with the gradual rise of crude oil. It can be said that the cost side has given PTA a strong driving force. In addition, from March to April, PTA equipment was rotated for maintenance, and the supply was narrowed, which caused PTA’s operating load to drop to a low of 70%. That is to say, starting from March, PTA’s contracts with domestic mainstream manufacturers The supply of goods is reduced, and the supply and demand pattern continues to be destocked. To a certain extent, it has driven the rise in PTA prices. In addition, the PTA spot market is tight, resulting in relatively firm prices. The bottom of PTA price gradually rises. However, as crude oil prices fluctuate, PTA will inevitably experience a mixed pattern of ups and downs. From the perspective of PTA processing difference, the average PTA processing fee in September was 487.59 yuan/ton, down 20.35% from the same period last year. After the National Day holiday, many PTA devices were shut down for maintenance, and the load dropped to 60.32%. As crude oil rose and supply narrowed, Boosted by , the PTA spot processing fee rose to 876.32 yuan/ton. Calculated based on the industry’s average processing cost of 600 yuan, the average profit level is 500-600 yuan/ton. Therefore, the restart of the PTA device is expected in the near future. For PTA companies, the processing fee is relatively considerable. Therefore, about 9.5 million tons of equipment are facing restarting in mid-October.
Recent PTA equipment maintenance updates
Source: Longzhong Information
Currently, 8.315 million tons of PTA devices are shut down and have not yet been restarted, accounting for 12.54% of the total production capacity. At present, the spot processing difference of PTA remains around 700-800 yuan/ton. If the processing difference rises to more than 600 yuan/ton, companies with processing fees of 500 yuan/ton will be boosted by the increase in processing difference or restart. On the other hand, if the processing fee drops to the level of 300 yuan/ton, then PTA companies with a PTA production capacity of less than 1 million tons will stop or enter maintenance. Therefore, processing fees are the key to considering the profitability of PTA companies. Judging from the PTA market situation, under the background of current production capacity expansion, the height of PTA processing fees is also a factor in the expected correction of PTA prices. Of course, the expansion or contraction of PTA processing gap is not just the increase in PTA prices and the relationship between supply and demand. This year, it is mostly Due to the boost on the cost side. Judging from the expectations of crude oil, the current price of PTA has basically reflected market expectations. In the short term, the market still needs to pay attention to the performance of crude oil. In fact, as we all know, the impact of crude oil on chemical products is very obvious, so in the later period, we still need to pay attention to the trend of crude oil and PTA processing differences. </p
