Analysis of PTA market operation in 2019 and prospect in 2020
Review of PTA Market Operation in 2019
1. Price review
In 2019, PTA prices fluctuated downward. In the first quarter, with the improvement of the macro environment and the boost from equipment maintenance, the price rose from RMB 6,000 / ton in early January to RMB 6,800 / ton in April. Since May, with the restart of maintenance equipment and the weakening demand for polyester, the PTA decreased rapidly from 6,600 yuan/ton to around 5,500 yuan/ton. In June, the downstream bottom hunting mentality and sino-us trade release good news, PTA price surged to 6800 above the level; PTA prices fell after July due to terminal drag and supply expansion expectations.
In January-March, PTA prices rose in shock. In January, due to the macro easing, the commodity atmosphere warmed up, PTA was affected by the unexpected shutdown of the device, polyester downstream stocking up before the festival was active, PTA inventory was less than expected, and the price rose. In February, with the recovery of the earlier failure device, the terminal market demand recovered slowly after the Spring Festival, and the polyester factory inventory pressure and load lifting were slow, which led to the reduction of the raw material PTA procurement demand, PTA inventory pressure, active delivery, and low negotiation. In early March, market prices rebounded on the positive news of macro tax reduction, unexpected shutdown of some plants and the release of march maintenance plan by factories, reduced shipments by suppliers and significant improvement in downstream polyester production and sales. PTA prices in the first quarter rose 11% from 5,930 yuan/ton to 6,600 yuan/ton at the end of March.
April-may, PTA prices fell sharply. On the one hand, due to the production of the PX plant, the price of PX has been withdrawn considerably. On the other hand, the industry profit is gradually transferred to PTA, and the suppliers are highly motivated to start. In addition, the previous PTA maintenance equipment is restarted successively, and THE PTA supply increases. At the same time, PTA prices lead to polyester costs rise, production and sales, the weaker the downstream polyester product inventory in a rising channel, polyester drop negative production increase, in cost and supply sandwiched between, although have Formosa PX plant explosion effect and suppliers to repurchase a boost, but without the fundamentals, after prices fell quickly. The PTA price dropped 13% from 6,770 yuan/ton to 5,590 yuan/ton at the end of May.
In June and July, PTA prices went up and down sharply. With PTA price falling to the periodic low point, downstream bottom-hunting mentality, inventory transferred to the terminal under order support, polyester load picked up, especially the rise of crude oil price in late June and the smooth progress of trade negotiation in G20 summit, PTA price quickly rose to the high level of this year. Due to the expansion of internal and external price spreads and active us dollar supply transactions, the import in July rose to 140,000 tons at the most. However, in early July, due to the impact of the bursting of over-the-counter options and the easing of the tight spot liquidity under the polyester production reduction, the PTA price dropped further. The PTA price rose to 6,835 yuan/ton from 5,435 yuan/ton at the beginning of June, and then fell back to 5,500 yuan/ton at the end of July.
From August to November, PTA prices went down unilaterally. On the one hand, the cost amplitude shrinks, and the PX price fluctuates around $790 / ton after August; on the other hand, the polyester load toughness continues, and the monthly average polyester price fluctuates between 90~92%. The suppression of PTA price by the cost end and the supply and demand end is slightly alleviated. Tired but after 1 to 3 quarter library, PTA social inventory at the beginning of the rise of less than 1 million tons to 1.7 million tons, together with new PTA plant put into production is expected in the fourth quarter, polyester factory in buying enthusiasm generally, short train of thought, although after October liquidity supply tight, individual time suppliers also have repo, but boost weak, PTA prices down shocks, from the 5485 yuan/ton in early August to the end of November 4775 yuan/ton, 13% decline.
According to CCF data, the average price of PTA in january-November 2019 is 5,857 yuan/ton, down 9% from the same period in 2018. The average DOLLAR price of PTA from January to November was $739 / ton, down 14% from the same period in 2018.
Prospect of PTA market in China in 2020
In 2020, the new production capacity of PTA will increase at a faster rate. From the perspective of actual output contribution, the output of hengli phase IV, Phase V and Xinfengming Phase I are the main ones. Zhongtai Kunyu's new investment may affect the load of other factories in Southwest China to a certain extent, so the actual effective supply next year may have a certain discount in its capacity base. The units of New Fengming Phase II, Fujian Baihong and Honggang Petrochemical are expected to be put into production around the end of 2020, and the actual production schedule still needs to be measured according to the project schedule, which will bring limited supply increase in the year. In general, it is expected that PTA output will grow at about 7% in 2020. For next year's polyester output, it is expected to grow by 6%. Therefore, from the perspective of supply and demand, PTA will gradually exhaust the inventory in 2020.
Poor processing aspect, in 2020, thanks to new technology, integrated processing costs down, and in the case of supply pressure increase, do not rule out undervalued by phases, next year the PX plant growth is slowing, consider the timing of the upstream and downstream production, is expected to present strong weak before, in the case of a weaker, in the third quarter may be slightly higher, annual assessment 2020 PTA process cost more than in 400-600 yuan/ton.
In terms of capacity utilization, the starting load of PTA will decline in 2020. With the new device being put into operation, under the expectation of processing fee compression, some enterprises with high cost or unstable raw material supply have certain variable stability in operation.
In terms of import and export, PTA enterprises will continue to expand export channels to relieve the domestic PTA supply pressure, expand the consumer market, and enhance the competitiveness of enterprises. It is expected that the export will increase gradually in 2020, and the import volume may shrink to a certain extent.
According to this assessment, 2020 terminal polyester demand growth forecast at 6%, polyester production in 2020 is expected to 53.05 million tons, for PTA consumption in 45.36 million tons, considering DOTP, PTT, and coatings industry in the areas of demand growth,, and consider a small growth, import and export pattern forecast forecast 2020 domestic PTA total demand in 46.86 million tons. The supply is most in accordance with the prediction of 48 million tons, and it is expected that PTA net export will increase in 2020, which is estimated to be about 200,000 tons, and the annual PTA social inventory accumulates to about 900,000 tons.