Marshall proposed in “Principles of Economics” that large-scale production is beneficial. To some extent, refineries win by scale, although not entirely. Shandong local refineries, which are characterized by being scattered, small and large, have successively introduced policies to promote the integration and transfer of small refineries.
According to the plan, by 2022, the local refining capacity of 3 million tons and below will be integrated and transferred; by 2025, the annual refining capacity of 5 million tons and below will be integrated and transferred; The following refining capacity will be integrated and transferred in batches and step by step… On the other hand, new refining and chemical projects all have the word “big” in mind.
Whether it is the annual 20 million tons refining and chemical integration project of Hengli Petrochemical Dalian Base, or the 40 million tons annual refining and chemical integration project of Zhejiang Petrochemical Ningbo Base, or It is the 16-million-ton refining and chemical integration project of Shenghong Petrochemical Lianyungang Base, with the “start” being above 15 million tons.
Private sector leads large refining and chemical industry
Continuous verification of leading performance
Integrated projects have been put into operation one after another, and the atmospheric and vacuum unit of the second phase of Zhejiang Petrochemical’s 20 million tons/year project has been put into operation. Among the non-seven major petrochemical bases, the 8 million tons/year refining and chemical project constructed by Hengyi Petrochemical in Brunei and the 10 million tons/year refining and chemical project of Zhongke Refining and Chemical in Maoming, Guangdong have been put into operation.
The planned construction scale of large-scale refining and chemical projects is hundreds of millions of tons, including both private and “three barrels of oil” projects. Judging from the construction situation, Shenghong Refining and Chemical’s 16 million tons/year project and Zhenhai Refining and Chemical’s 15 million tons/year refining expansion and expansion project will be completed in 2021. Hengyi Petrochemical and Yulong Island projects will be completed in 2023; Sinopec Ancient Lei Refining and PetroChina’s Guangdong petrochemical projects are advancing normally, and coupled with the reconstruction and expansion of refining and chemical projects, a batch of refining and chemical production capacity will be put into operation in 2022-2023.
Looking back at the development history of large-scale refining and chemical projects during the “Thirteenth Five-Year Plan” period, the overall picture shows that the project planning volume is large; the proportion of completed projects is small; the private sector is more “Oil” has the characteristics of fast construction speed and high starting load. Against the background of wide fluctuations in oil prices in 2020, large private refining and chemical companies have performed well. Rongsheng Petrochemical’s net profit attributable to parent companies in 2020 has doubled compared with last year. The stock’s performance has improved significantly. Hengyi Petrochemical has hit the bottom in 2020 The net profit attributable to the parent company for the year was basically the same as that of 2019. For private petrochemical companies whose main business is mid- and downstream polyester, developing upstream refining and chemical projects and ultimately realizing an integrated layout of the entire industry chain has given the company complete advantages in terms of cost, product variety, production efficiency, etc., completely changing the The competitiveness factors and investment logic of the industry are revealed.
From the perspective of asset scale, the four large-scale refining and chemical projects with upward development of private polyester leaders can all achieve doubling of their total assets after they are put into operation. The amount of capital required to double the scale is huge, and the projects have relied on tens of billions of syndicated loans, non-public issuance of stocks, and supplemented by bond issuance to raise funds.
The asset-liability ratio increases by 10-20 percentage points before and after the financing is completed. Even so, there is still a certain possibility that large-scale refining and chemical projects will be stranded during the construction and commissioning stages. Therefore, to successfully invest in and build an integrated refining and chemical project, the project operation capabilities and corporate quality requirements of private enterprises are quite high. The large private refining and chemical companies that have been successfully constructed and put into operation are all high-quality targets in the petrochemical sector.
From the perspective of planning time, it will take 2-3 years for a large refining and chemical project to start construction and be fully put into operation. In addition to the preliminary planning and approval stages, it It takes four years or more, and it is not uncommon for projects to be suspended and suspended during the process of approval and construction. Including the difficulty in obtaining approvals for large-scale refining and chemical companies during the “14th Five-Year Plan” and the fact that project construction lags behind the leaders, the pioneers of large-scale refining and chemical companies are in an advantageous position.
In addition, the construction time of the second phase of the large refinery project has been greatly shortened due to the complete public facilities. Therefore, for large private refining and chemical companies that have completed the first phase of project construction, while seizing the opportunity, the probability of latecomers trying to catch up is extremely low.
Leaders gradually gain control over PTA pricing
Industry capacity has begun to be phased out
The industry’s production capacity will begin to be phased out, and PTA’s absolute leading advantage is significant. After the adjustment of the production capacity structure of the PTA industry in recent years, my country’s PTA industry has gradually formed a leader-dominated pattern. As of the end of 2020, my country’s PTA industry production capacity, excluding outages and dismantled production capacity, was approximately 62.72 million tons/year.
The top ten domestic PTA production capacity companies account for 72.5% of the total production capacity. Sinopec’s subsidiaries have a total production capacity of 3.325 million tons/year, and the remaining other production capacities account for The ratio is about 22.2%. Large refining and chemical companies and leading polyester companies (Rongsheng, Hengyi, the company, Tongkun, Xinfengming, Dongfang Shenghong) accounted for 54.81% of the PTA production capacity. The PTA industry has fully formed a giant pattern, and the leaders have gradually mastered the role of PTA. Pricing power.
In 2018, Fuhaichuang (formerly Xiangli Petrochemical) has an annual production capacity of 4.5 million tons and Reignwood Petrochemical (formerly Far East Petrochemical) has an annual production capacity of 1.4 million tons. Large PTA companies have resumed production after years of bankruptcy and reorganization. In 2020, the second phase of Xinfengming Dushan Energy’s 2.2 million tons/year, and the company’s 4# and 5# total 5 million tons/year devices were put into operation. In the past three years, the PTA production devices have basically been large-scale devices, and the pressure on the PTA supply side has increased.��
According to the PTA production increase plans disclosed by each company, from 2021 to 2022, Honggang Petrochemical, a company, Yisheng Petrochemical, Zhongjin Petrochemical, Tong Represented by leading companies such as Kunming Co., Ltd., my country still has a planned PTA production capacity of 39.6 million tons/year, and the construction scale is more than 1 million tons/year. my country’s PTA supply side shows an obvious structural overcapacity pattern: large-scale PTA production equipment continues to expand, and backward PTA production capacity is slowly phased out.
Giant extends to downstream and terminal markets
Reap profits
While mainstream polyester and polyester factories continue to develop into the midstream and upstream, they are also slowly moving into the downstream and terminal markets.
Among the three specifications of polyester filament products, DTY has always been the most profitable. Many melt direct spinning polyester filament factories are also actively adding texturing. To enter the field, the six major polyester filament factories have a total of around 2,100 texturing equipment. In addition to large-scale production, the raw material POY is self-produced and has strong cost control capabilities, so it has a strong say in market pricing.
However, in the past two years, the number of texturing machines in polyester filament factories in Fujian has increased rapidly, and the number of chemical fiber factories with more than 200 units in Xiaoshao and other regions has also increased. With the increasing demand for functional fabrics, the future texturing field will not only grow in scale, but also make breakthroughs in the field of functional and differentiated fibers.
The downstream factory of polyester filament POY is the texturing factory, and the downstream factory of polyester filament FDY and DTY The factory is a weaving factory.
Hengli has been deeply involved in the weaving field for many years. It owns more than 10,000 water-jet looms and more than 30,000 textile equipment, with a production capacity of more than 3 billion meters per year. It is one of the largest textile production bases in the world.
In the early stage, Hengli Group held signing ceremonies with the Gui’an New District Management Committee and Rifa Textile Machinery. The former was for investment and construction (Gui’an New District) Intelligent new materials industrial park project, the latter is a total purchase of more than 10,000 high-end chemical fiber twisting machines and high-speed intelligent water-jet looms.
In December last year, Tongkun Group also signed an investment agreement with the Shuyang Economic and Technological Development Zone Management Committee, which involved 10,000 looms.
In the field of weaving, a water-jet loom with a scale of more than 1,000 can be called a large factory, and a water-jet loom with a scale of more than 200 can be called a large factory. The total number of looms in Wujiang, the traditional gathering place for water-jet looms, is around 240,000. This shows that Hengli and Tongkun extend their vertical reach into the weaving field.
They mainly produce high-end textile fabrics. With their advantages in the field of functional fibers, they may be able to better help the upgrading of my country’s textile and apparel industry in the future. As the concentration of downstream weaving production capacity gradually increases, the trading model of shipments from weaving factories may improve in the future.
Overall, with the advantages of industrial integration, the risk resistance, profitability and capital reserve capabilities of leading polyester companies will be greatly improved.
As mainstream polyester factories continue to improve the layout of the “PX-PTA-polyester-spinning-texturing-weaving” industrial chain, in the industrial chain Under the background of integration, leading polyester companies do not need to “bet” on a single link to avoid huge losses due to a decline in the prosperity of a certain link. Instead, they can allocate profits as appropriate based on changes in the profit margins of each link to better enhance the industry’s influence. force.
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