PX Into The Era Of Excess Capacity PTA Short Term Difficult To Say Stable

　　 PX enters Oversupply times

Following the pace of PTA expansion, PX capacity has increased significantly this year. As of September, China's PX capacity reached 12 million 215 thousand tons / year, accounting for 29.6% of Asia's capacity, and Asia's PX production capacity reached 41 million 460 thousand tons / year, and Asia's PX started an average of 70%, and its output was about 29 million 20 thousand tons. The PTA capacity in Asia is about 52 million tons / year. According to the consumption of 0.66 tons of PX per ton of PTA and 65% of the start-up 65%, the demand for PX is about 22 million 300 thousand tons, while the output of PX is 29 million 20 thousand tons. At present, 6 million 720 thousand tons of output are oversupply. From oversupply to oversupply in the past, PX prices and profits have been suppressed. This is also the main reason for the downward trend of PTA prices since the beginning of this year. PX has also shifted to a low profit era.

Because PX Supply is increasing, making PX profit and price being suppressed. The production enterprises change from eating meat into soup. PX has the highest profit of 300 USD / ton, but PX profit is only 35 USD / ton at present. MX Producing PX or even losing money. As of September 30th, the price difference between PX and MX was US $190 / tonne, and the outsourced MX PX system still had a profit of US $40 / ton. The difference between PX and naphtha is US $400 / ton. The reasonable price difference between PX and naphtha approved by the industry is US $300 / ton, and the purchase of naphtha to PX is 100 USD / ton. It can be judged that the profit margin of the PX industry is relatively good, and the supply of PX will increase in the future, so that the price of PX will weaken relative to naphtha price.

PTA joint limited production price protection far-reaching impact

In May, PTA enterprises, which were in deep mire of losses, sought alliance. The pricing rules of contract settlement price were changed from spot price + premium to raw material PX cost and +720 yuan processing fee. Since then, the price of PTA has been pegged to the price of PX, which can be seen from the fluctuation of the spot price of PTA around the cost price after the price limit is guaranteed. It shows that PTA and its downstream enterprises have a high degree of recognition for the pricing mechanism. Joint production and price protection also saved PTA enterprises from fire and water, avoiding vicious competition, and had a great impact on the long-term development of the industry.

Based on the PX price of 1229 US dollars per ton in September 30th, the production cost of PTA is 6630 yuan / ton. As PX now produces profits between 40 and 100 US dollars / ton, assuming that naphtha prices remain unchanged, PX's production profits can be compressed from 40 to 100 US dollars / ton, when the minimum production cost of PTA is 6150 yuan / ton. Since June, the futures contract has generally had a discount of 200 - 400 yuan / ton for spot contracts, so the lowest price of PTA1501 contracts may be between 5750 - 5950 yuan / ton. That is to say, PTA still has room to explore. In addition, the collapse of crude oil during the National Day also contributed to the overall decline of naphtha MX PX, and further weakened the cost support for PTA.

In general, the continuous decline of crude oil has reduced the cost support for PTA. In the core industry chain of PX - PTA polyester, PX production links still have good profits, and the compression process has not yet been completed. PTA can hardly be stabilized in a short period of time when there is no obvious improvement in downstream consumption.