What is the supply situation of PX and short fiber? What are the key points worthy of attention in the future
At the PTA and short fiber sub-forum of the 2021 China (Zhengzhou) International Futures Forum, Wang Guangqian, Research Director of Zhejiang Hengyi International Trading Co., Ltd. said that currently The stage of greatest supply pressure for PX has passed. Although there may be some increases in the fourth quarter, overall, the supply pressure on PX production capacity is not great.
According to Wang Guangqian, from 2017 to 2018, PX’s actual capacity expansion was relatively limited. In 2019, as Hengyi put into production the private petrochemical chain, there was a significant increase in the supply side. Moreover, these incremental production capacities are mainly realized in Q3 and Q4. The corresponding output is in 2020, so we can see that the intensive supply pressure of the entire PX in 2020 will be the greatest. This will lead to the absolute price of PX and the price difference of PX-N reaching a historic low in 2020, which will lead to the collapse of PTA’s raw material costs and bring the absolute price of PTA to a new low since 1999. “The oversupply of PX has a huge impact on the collapse of the cost side of PTA and the decline of the absolute price of PTA.” He said.
However, Wang Guangqian said that the new PX production capacity since 2020 has been relatively limited. In 2021, it will mainly be the 4.8 million tons of production capacity of Zhejiang Petrochemical. However, the current crude oil quota has been eased, and Zhejiang Petrochemical’s equipment will also form a certain supply increase in the later period. Generally speaking, the supply pressure on PX production capacity in 2020 is not that great.
Wang Guangqian said that except for Zhejiang Petrochemical, the rest of the equipment will most likely be put into production in the second half of the year, or Q4, or even be postponed. Therefore, from the perspective of sustained supply, it is slower than in 2019 and 2020. This is also the reason why it is said that in this round of coal-to-electrification, after Hengli and Zhejiang Petrochemical have advanced the first and second phases, this round of production capacity has entered the second half, or even the end.
“Therefore, the peak of PX production capacity in 2021 and 2022 has passed, so the pressure on PX has been eased compared to the previous two years. Recently, from the perspective of PX supply and demand, with the PTA’s start in September The restart of the maintenance cycle corresponds to an increase in the demand for PX. Therefore, the PX price difference and processing fees will most likely oscillate in the range in the later period. This price difference may not be adjusted until Zhejiang Petrochemical Phase II forms a significant increase in supply. Or the price may cause certain pressure,” Wang Guangqian said.
Unlike PTA, downstream short fiber is currently on the eve of the production capacity launch cycle. Wang Guangqian said that in fact, the production capacity of short fiber this year is not small, especially the production of 300,000 tons in October. However, this year’s production capacity deployment is mainly focused on non-standard products. The launch of cotton thread for futures delivery is relatively small. Therefore, compared to standard products, non-standard products are relatively weak.
“However, in the future, there will be relatively large production capacity launches in industries such as Xinfengming (603225), Hengyi Yida, Sichuan Longtou, and Zhongtai. So next year, the supply of short fiber production capacity will The pressure is still relatively high.” Wang Guangqian said that it should be noted that there is a difference between the production capacity release corresponding to the production capacity list and the actual realization of production capacity. In fact, there is uncertainty as to whether the production capacity deployment can be realized at that point in time, and the market will need to closely track it later.
Wang Guangqian said that the current status quo is that the operating rate of short fiber has been maintained at 99% or even high-load operation near 100% from last year to this year. The supply pressure brought about by high-load operation and the relatively loose period on the demand side have led to losses in staple fiber production profits. After production losses, the entire operating load of the short fiber factory may have to start to be reduced. At present, the operating rate of the entire short fiber factory is already lower than the corresponding operating rate during the seasonal maintenance period during the Spring Festival. If the subsequent processing is still maintained at a low level, it cannot be ruled out that some devices will continue to be inspected later.
In addition, Wang Guangqian said that from the perspective of terminal demand, on the one hand, it is affected by the epidemic, and on the other hand, from the perspective of overall demand elasticity, including table demand, we maintain a neutral judgment. Subsequent terminals may usher in some replenishment. If there is some realization in the later period, it may be in the fourth quarter of the traditional peak demand season. From a boundary point of view, there is room for improvement on a quarter-on-quarter basis.
AAA
Disclaimer:
Disclaimer: Some of the texts, pictures, audios, and videos of some articles published on this site are from the Internet and do not represent the views of this site. The copyrights belong to the original authors. If you find that the information reproduced on this website infringes upon your rights and interests, please contact us and we will change or delete it as soon as possible.
AA
