The PTA market was bitter and sweet in the first quarter of 2021. Due to strong support from the cost side, the price of PTA exceeded the 4,000 yuan mark, but the processing fees were miserable. The performance of crude oil and macroeconomics is the main factor causing the rise of the PTA market, while the changes in fundamental supply and demand appear a bit weaker.
1. The price returns to the 4,000 yuan mark
Figure 1 PTA spot market price comparison Picture
After exceeding 4,000 yuan in the first quarter, the price of PTA has been in a stalemate. At the beginning of 2021, Saudi Arabia unexpectedly announced at the OPEC+ meeting that it would voluntarily cut production by 1 million barrels per day in the next two months, which brought positive support to the market. What is also unexpected is the achievement of PX Asia ACP in February. PXACP was unexpectedly reached at US$705/ton in February, which brought strong support in terms of costs. In addition, after the Spring Festival holiday, international crude oil prices rebounded strongly again due to the cold wave weather that led to a reduction in U.S. crude oil production. At the same time, vaccines in Europe and the United States were actively promoted. With the release of good news on the cost side, PTA prices moved upward, and finally the market price returned to a position above 4,000 yuan in mid-to-late February.
2. Supply and demand accumulation slows down
Figure 2 PTA daily balance and expectations
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As can be seen from the above figure, after entering January, the PTA accumulated inventory continues to move upward. As the Spring Festival holiday approaches, downstream Most polyester companies have entered a state of maintenance, and supply and demand have accumulated significantly. After late February, the industry began to return to the market, and polyester companies gradually resumed operations. Especially in March, the average polyester load reached a high of 92.49%. At the same time, units such as Reignwood Petrochemical, Hengli Petrochemical Line 4, and Xinjiang Zhongtai started operating in March. Maintenance began in March, and there was a periodic destocking phenomenon in terms of supply and demand. According to calculations by Longzhong Information, PTA production in the first quarter reached 13.1843 million tons, and polyester production was 13.7637 million tons. Calculated at 0.855, the corresponding PTA demand was 11.768 million tons.
The average processing fee in the third and first quarter was 362.52 yuan/ton, a year-on-year decrease of 32.48%
Figure 3 PTA processing fee trend chart
The average PTA processing fee in the first quarter was 362.52 yuan/ton, for newly put into production equipment In other words, the processing fee profit in this position is relatively weak, while for other devices, the processing fee is miserable. From the perspective of processing fees, the processing fees for newly put into production PTA equipment are about 300-350 yuan/ton, while those for earlier units are between 400-700 yuan/ton. Therefore, judging from the current processing fees, the profitability of PTA production companies is not optimistic, and some companies are in a state of loss.
As for the PTA market in the second quarter, supply and demand were affected by the maintenance of multiple sets of equipment, resulting in significant destocking.
Table 1 List of recent PTA device changes
From the supply side, many sets of Large-scale devices are facing maintenance, and most of the early shutdown devices have no clear restart time. Therefore, the shutdown capacity is expected to reach 30 million tons in the entire second quarter, and the supply side will see a significant contraction. At the same time, many new PTA devices will be put into production in 2021. In the second quarter, Yisheng New Materials’ 3.3 million tons device will be put into production. Therefore, due to the collision of centralized equipment maintenance and the commissioning of new devices, it is expected that the PTA inventory accumulation situation will be again in the middle and late second quarter. appear.
From the demand side, the overall load of polyester is currently at a high level of over 92%, and the demand supports PTA well. However, the downstream polyester may enter the off-season in the market outlook, especially the recent performance of terminal orders has been average. Polyester production and sales have been flat, and inventory has accumulated slightly. If there is no sign of an outbreak of orders in the later period, polyester companies may be under inventory pressure and may reduce production or In the event of price reduction, the demand for PTA will have a certain impact.
Generally speaking, PTA may experience phased destocking in the second quarter, but in the later period, with the commissioning of new equipment and the increase in market supply, the cumulative The library pattern will appear again. From a cost perspective, crude oil is still the main factor affecting the market, but the trend of crude oil is unclear, so we must pay close attention to the fermentation of supply and demand issues. </p
