[168TEX News]Editor’s note: In April, the upstream and downstream polyester markets were basically spent with explosions. On the evening of April 6, the Gulei Tenglong Aromatics PX project located in Guleigang Economic Development Zone, Zhangzhou City, Fujian Province jointly The device exploded. An explosion occurred at the Nanjing Yangzi Petrochemical Plant in the early morning of April 21, and the relevant production equipment has been shut down. Two explosions made the upstream and downstream polyester markets boom. Moreover, at this stage, international crude oil prices are also struggling to strengthen, which is the driving force behind the rise in polyester product prices. So how will the upstream and downstream polyester and weaving markets develop in the future? The information analyst team of China Silk City Network conducted research with this question in mind.
In late April 2015, a team of information analysts from China Silk City Network came to Ningbo, Zhejiang, and conducted on-site visits to Yuanda Products Group Co., Ltd. and Ningbo Jinsheng Fiber Technology Co., Ltd.
Yuanda Property Group Co., Ltd.
Yuanda Products Group Co., Ltd. was established in July 1994. It has now developed into a comprehensive enterprise group integrating trade, logistics, and investment. Its annual sales exceed 45 billion yuan, and it has been shortlisted among the top 500 Chinese enterprises for consecutive years. The group is mainly engaged in the trading of bulk commodities such as petrochemicals, energy, metals, agricultural products, etc. It has more than 30 wholly-owned and holding subsidiaries across the country, and has established business institutions in countries and regions such as Singapore, South Korea, and Hong Kong, and has basically formed a network headquartered in Ningbo. , strategic layout to serve the whole country and go global.
The information analyst team of China Silk City Network introduced the purpose of the team’s trip during the exchange, which was mainly to understand Yuanda Properties Group’s analysis of the current PTA and ethylene glycol market trends and its prediction of the future market trend.
PTA performance is expected to improve
Most of the people have bullish views on the PTA market recently. Yuanda Dai Yumin believes that in the past half month, the PTA market is still dominated by long positions. He believes that the reasons for the long market are as follows: First, the current international Oil prices are showing an upward trend, and it should not be a big problem if the market outlook climbs to 60 US dollars per barrel. As the source of polyester, the price of crude oil is strong, which is beneficial to the entire polyester market, thus supporting the confidence of those in the PTA futures market to go long. . Secondly, PX is also expected to strengthen. The current phase is the intensive maintenance season for PX manufacturers, coupled with the explosion of PX devices, resulting in a reduction in PX supply. The reduction in PX project capacity will alleviate overcapacity to a certain extent. Third, the operating rate of downstream polyester manufacturers has increased, production and sales have increased, and the demand for raw materials market has increased.
However, after analyzing the multiple factors in the market, the short side also has a reason to go short, and that is how to digest the huge inventory of PTA. At the end of the first quarter of 2015, the domestic social inventory of PTA reached more than 2.4 million tons, compared with 1.5 million to 1.6 million tons under normal circumstances. From the inventory point of view, it takes more than 2 months to digest the high PTA inventory. With the advent of the second quarter, the traditional off-season of polyester production and sales has quietly arrived, and the slow reduction in polyester demand has also increased the difficulty of digesting PTA inventory. However, the 4.5 million-ton PTA plant of Xianglu Petrochemical supporting Tenglong Aromatics has temporarily shut down for maintenance on the day of the explosion. In addition, the 1.2 million-ton unit of Ningbo Taihua has recently been scheduled to shut down for maintenance. The operating rate of domestic PTA plants will drop sharply to 60 %, compared with nearly 80% of the operating load of the downstream polyester link, the destocking process of PTA factories is expected to accelerate.
When talking about the losses of PTA manufacturers, Dai Yumin traced back to the previous two years. The losses of PTA manufacturers were relatively serious. However, since this year, the profits of the industrial chain have been basically redistributed, and the profit elasticity of leading companies is huge. In the fourth quarter of last year, Rongsheng Petrochemical and Hengyi Petrochemical suffered huge losses of 410 million yuan and 490 million yuan respectively. In the first quarter of this year, they respectively forecast net profits of 0-50 million yuan and 10 million-60 million yuan. Since the upstream raw material PX is expanding faster than the PTA and polyester segments, profits are expected to be redistributed to the PTA-polyester filament segment; the concentration of the PTA segment is rapidly increasing and it has a stronger voice. At the same time, the recent bankruptcy of Far East Petrochemical also indicates that the The supply of links is becoming more orderly. Therefore, PTA’s future performance is expected to continue to rise.
The “bull” market for ethylene glycol remains
Ethylene glycol is one of the upstream raw materials for polyester polyester yarn, and ethylene glycol is widely used. It is mainly used to produce polyester fiber, PET polyester film, etc. Polyester products account for 50% of ethylene glycol consumption. More than 90%, of which polyester accounts for 55% of total consumption. Since the beginning of this year, the ethylene glycol market has been on a strong upward trend, and its increase has far exceeded that of PTA. When asked about the reason, “The rise in ethylene glycol market is mainly due to its lower inventory. In February last year, the inventory of East China ethylene glycol port surged to 1.18 million tons, reaching the highest level in history. Subsequently, MEG was at Destocking stage. Simply speaking, this destocking operation is relatively smooth, which has led to the strengthening of the ethylene glycol market. Especially since this year, the ethylene glycol port inventory has dropped to around 550,000 tons. Therefore, low inventory is bound to happen. It will make the ethylene glycol market strong.” Dai Yumin said. In addition, the explosion of Yangzi Petrochemical in April this year ignited the confidence of the market. Yangzi Petrochemical’s ethylene glycol production capacity is 260,000 tons/year, accounting for nearly 10% of the total domestic production capacity. 5%, although the proportion is not large, but confidence is very important.
The current countryThe overall operating capacity of internal ethylene glycol manufacturers remains at around 60%, and downstream procurement demand is normal. However, the surge in crude oil has a greater impact on the ethylene glycol market. Therefore, it is expected that with low port inventories and favorable external support for crude oil, ethylene glycol will Continue to operate at a high level.
Ningbo Jinsheng Fiber Technology Co., Ltd.
Ningbo Jinsheng Fiber Technology Co., Ltd. is a wholly foreign-owned enterprise with a registered capital of US$12 million. It is located at the intersection of Xingci 4th Road and Binhai 4th Road in Hangzhou Bay New District, Ningbo, covering an area of 108 acres. The company has an annual output of 120,000 tons of liquid-dyed differentiated polyester fiber complete production equipment, mainly producing POY75D, 100D, and 150D. The company has a total investment in fixed assets of 300 million yuan, nearly 500 employees, and annual sales revenue of more than 1.2 billion yuan.
General Manager Zhang Zhiwei of Ningbo Jinsheng Fiber Technology Co., Ltd. introduced the basic situation of his company to the analyst team, and also gave us a simple analysis of the weaving market and coal-to-ethylene glycol market. Mr. Zhang’s unique insights made him The team benefited greatly.
How long can the weaving market stay “crazy”?
Throughout April this year, the entire downstream weaving market was immersed in a “jubilant” atmosphere. Market orders were in good condition, and manufacturers were relatively optimistic about destocking since last year, and their enthusiasm for purchasing raw materials also increased. , As a result, the inventory of chemical fiber factories is currently low, and some are even oversold, resulting in negative inventory. Therefore, chemical fiber factories have to increase operating rates to increase inventory replenishment. Mr. Zhang also showed a serious expression when he talked about the recent good situation of chemical fiber factories, because after this round of soaring prices, there are also many hidden dangers in the market. At present, downstream weaving manufacturers are actively purchasing raw materials. It cannot be ruled out that they are driven by the mentality of buying up and not buying down. There are many foodies, and manufacturers’ inventory of raw materials will increase significantly. For example, Ningbo Jinsheng Fiber Technology Co., Ltd. has oversold supply for May, so the downstream market replenishment power will be insufficient in May, and the market may deteriorate by then. However, the market is not completely without positive support. If crude oil continues to rise in mid-to-late May, chemical fiber raw materials may continue to chase the rise. At present, the operating rate of the entire polyester chemical fiber industry is at a high level. However, Mr. Zhang believes that the longer this wave of market goes crazy, the worse the market outlook will fall.
Coal-to-ethylene glycol faces severe challenges but has ample market potential
In recent years, coal-to-ethylene glycol has been a hot topic in the market. From 2009 to 2014, ethylene glycol imports increased year by year, and domestic coal-to-ethylene glycol did not form an important supplement as scheduled. Coal-to-ethylene glycol is made from coal-based synthesis gas through the oxalate hydrogenation route. Since the beginning of 2015, the development speed of coal-to-ethylene glycol has accelerated significantly. According to relevant data in 2014, the operating load of Xinjiang Tianye’s 50,000 tons/year syngas-to-ethylene glycol project reached 96% in 2014; Tongliao Jin The annual load of coal is 76%, with the average load in the second half of the year reaching 89%; the ethylene glycol products of Sinopec Hubei Fertilizer are mainly internally digested by the sister company Yizheng Chemical Fiber; the ethylene glycol products of Henan Coal Chemical Yongjin Anyang are mainly self-produced by Henan Coal Chemical used in polyester factories.
When talking about the development of coal-to-ethylene glycol in recent years, Mr. Zhang believed that coal-to-ethylene glycol manufacturers are currently facing many difficulties. First, the profit margins have shrunk, causing them to lose their cost advantage. Secondly, quality issues and cost competitiveness have It is also a major problem faced by coal-to-ethylene glycol producers. At present, some manufacturers have low profit margins, and some factories have reduced operating load due to shrinking profits. In particular, the three newly built coal-to-ethylene glycol units in Henan have been unstable since their operation in 2014, with very low output rates. . The third is the issue of replacement technology. At present, ethylene glycol using the oxalate hydrogenation route is the mainstream in the development of coal-to-ethylene glycol. However, oxalate ester is expensive, which increases the cost of coal-to-ethylene glycol production. However, in October 2013, Eastman Chemical Company announced that it had cooperated with Johnson Matthey Davie Technology Co., Ltd. (JM Davie) to develop an advanced method for producing ethylene glycol using syngas as raw material without passing through oxalic acid intermediates. The patented technology has entered the pilot stage. The fourth is environmental pressure. The new “Amendment to the Environmental Protection Law” has been officially implemented since January 1, 2015, and environmental protection issues have been put on the agenda. Therefore, modern coal chemical projects, including coal-to-ethylene glycol, will face more stringent environmental protection requirements.
Mr. Zhang concluded at the end that for domestic coal-to-ethylene glycol production, it is not easy for the market to improve, and factory operations are still at a low level. However, as the price of ethylene glycol rises, coal-to-ethylene glycol may not be able to bear it. If the price of coal-to-ethylene glycol reaches 4,000-4,500 yuan/ton, the operating rate of manufacturers will increase. By then, the market for ethylene glycol will The tight supply of alcohol will be alleviated to some extent.
(If companies or manufacturers in the industry are interested in research interviews, you can call the China Silk City Network appointment interview hotline 0512-63516900-8032)
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