Polyester Industry Summary and Outlook
Domestic and foreign supply has decreased, and there is support for the PX end in March. OPEC+’s voluntary production cuts have been extended to the end of June, and the focus of international crude oil operations is expected to shift upward, with support for the cost side. In March, domestic Zhongjin Petrochemical’s 1.6 million ton unit is scheduled to be overhauled for two months. A 2.25 million ton unit of India’s Honest Industry is scheduled to be overhauled. South Korea’s GS1# 400,000 ton unit also has an overhaul plan. Domestic and foreign supplies are reduced. PXN may be available in March. Restorative rise.
New equipment for maintenance of large equipment was put into production, and PTA supply-side support was limited in March. Yisheng Chemical’s 3.75 million ton unit was originally scheduled to undergo a one-month maintenance at the end of February, but it has now been postponed to mid-to-late March; Hengli Huizhou’s 2.5 million ton unit and Fuhai Chuang’s 4.5 million ton unit have maintenance plans; the remaining units will maintain load reduction or continue maintenance. If large-scale equipment maintenance is implemented, the supply of PTA stock equipment is expected to tighten in mid-to-late March. However, at the end of March, two new units of Yizheng Chemical Fiber 3#3 million tons and Taiwan Chemical Fiber 1.5 million tons are scheduled to be put into operation. The commissioning of the new units will offset the positive support brought by maintenance to a certain extent.
Domestic production is expected to shrink, import pressure is not great, and the supply side of ethylene glycol has strong support in March. Since late February, Shanxi Meijin 300,000 tons, Shaanxi Coal Yulin 600,000 tons, Shanxi Woneng 300,000 tons, Anhui Haoyuan 300,000 tons, Hong Sifang 300,000 tons and Guizhou Qianxi 300,000 tons. The equipment has maintenance plans; in mid-to-late March, integrated units such as Zhenhai Refining and Chemical’s 800,000 tons, Zhongke Refining and Chemical’s 400,000 tons, and Fude Energy’s 500,000 tons also have maintenance plans, and domestic production is expected to decrease. Overseas installations are recovering slowly, import growth is limited, and ethylene glycol supply was relatively tight in March.
Terminal demand is seasonally strong, so pay attention to order placement. March is a small peak season for weaving demand, and order stocks are expected to increase. The stocking of raw materials in weaving factories before the holidays will mostly remain in mid-to-early March. If orders are effectively placed, demand-side support is expected to strengthen.
Summary and strategy recommendation: Fundamentals are expected to improve. In March, the polyester sector may first decline and then rise. Take the opportunity to seize the opportunity for a restorative rebound. Supply and demand are mismatched. The trend of PTA is relatively weaker than other varieties in the same sector. You can choose the opportunity to try to go long and short PX. PTA or polyethylene glycol empty PTA arbitrage. Crude oil and macro sentiment will still affect the rhythm of market fluctuations, so beware of recurring risks.
Risk factors: changes in the geopolitical situation, the implementation of OPEC+ production cuts, macro risks, upstream and downstream device maintenance and production progress, and terminal orders.
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