PTA Demand side analysis

chart 12017-2019 Comparison of polyester starting rate in 2006

Source: lung Chung

Long Zhong information data showed that the average load of polyester in October was 89.27%, 4.88% higher than the same period last year. Recent market news came out that polyester factories were compacted by profits, with the expectation of production reduction and parking. This news has been coming out since the National Day holiday, but no substantial reduction has yet been made. But it is not groundless. It is understood that the Spring Festival this year is less than 2 weeks ahead of last year. Therefore, the phenomenon of polyester production and parking is still there.

As can be seen from the above picture, the low load of polyester starting load in the past three years is in the Spring Festival of February, and there will be a drop in the month before the holidays. The Spring Festival in February is basically in the middle of February, but this year's Spring Festival time is in January 25th. It is concluded that if the polyester plant is concentrated in production reduction, parking or near the end of December, this time period can be directly to the Spring Festival holiday (the shortest time for polyester repair is 20 Yu Tian during the Spring Festival, the longest being nearly 2 months). If the car stops at the end of November or December, the device will resume operation at the end of December or mid January.

The reduction and parking of polyester factories will greatly reduce the demand for PTA in any time period. Due to the weakening of its demand, the PTA market is hard to support and will have a great impact on the PTA market.

PTA Supply analysis

chart 22018-2019 year PTA Yield comparison map

Source: lung Chung

As can be seen from Figure 2, China's PTA output is 3 million 689 thousand and 400 tonnes by the year October, an increase of 12.5% over the same period last year. In 2019 1-10, the total output was 36 million 875 thousand and 500 tons, an increase of 9.08%. As shown in this picture, the output of this year is obviously higher than that of last year. The main reason is that PTA is in a high profit pattern this year, and the PTA factory has overloaded production. Second, in the first half of this year, Sichuan's energy input device was put into operation smoothly. In the second half of October, the new Feng Ming PTA project was successfully put into operation, and there are still many sets of installations planned and put into operation in the future. Therefore, the PTA production capacity will be greatly improved in the next few years, and the new round of expansion cycle will be coming soon.

surface One Future PTA Plant commissioning

Unit: 10000 tons

Source: lung Chung

To sum up, with the release of new capacity of new Feng Ming, Hengli petrochemical and Xinjiang Zhongtai, the PTA market has entered a new round of capacity overproduction cycles. At present, the demand for PTA market is still supported, but with the success of PTA's new production, the supply increase has begun to appear. The industry has a strong mentality in the market outlook, and the demand for short-term demand in November still has strong support.