The Average Life Cycle Of PTA Devices Is Too Short And Overcapacity Is Becoming Increasingly Prominent.

PTA is the largest production and consumption of organic chemicals in China. It is an important hub linking the two pillar industries of the petrochemical industry and chemical fiber textile industry, and plays an important role in the national economy.

At present, most of PX in China is used to produce PTA.

Looking downstream, the main use of PTA in China is to react with ethylene glycol to produce PET.

(polyethylene terephthalate) to produce polyester filament, polyester staple (textile raw material) and bottle grade polyester chips.

Statistics of China's PTA industry development research and Outlook show that in June 2016, China's PTA industry was shut down and the PTA plant capacity exceeded 14 million tons / year, close to 1/3 of PTA total capacity.

It is easy to stimulate vicious competition without the rapid development of forward-looking planning.

Since 2013, China's PTA industry has been running at a slight profit or even a negative profit range.

Experts predict that in the next 5 years, the PTA industry is still in a state of serious overcapacity, and its profitability will remain depressed for a long time.

Compared with PTA devices in other Asian countries, the average life cycle of China's PTA devices is too short, not only can not bring the expected benefits to the enterprises, but also lead to high non-performing loan rates of banks and serious waste of social resources.

"As the overcapacity is becoming increasingly prominent, in the fierce market competition, some market competitiveness is poor, PTA devices are overburdened, and are in a long-term shutdown. However, due to the lack of a perfect market exit mechanism, the PTA device in shutdown state is" dead but not stiff "and can not achieve capacity upgrading.

Experts believe.

At the same time, PTA industry participants continue to launch large PTA projects with the support of local governments and financial institutions for the purpose of industrial integration, enhancing competitiveness and occupying the market, resulting in further overcapacity in the PTA industry.

Through the comprehensive evaluation of the competitiveness of the PTA plant, the Planning Institute of the petroleum and chemical industry believes that in the next 5 years, the capacity of PTA in China's PTA market will still be shut down for 5 million 300 thousand tons / year.

Recently, from the petroleum and Chemical Industry Planning Institute, China's PTA (terephthalic acid) production capacity increased from 3 million tons per year in 2000 to over 50 million tons / year in 2016, and the overall profit level of the industry declined rapidly.

With the rapid growth of production capacity, the situation of PTA upstream and downstream industry chain is also changing rapidly. Affected by various factors, upstream PX (p-xylene) capacity growth is blocked, long-term supply is insufficient, PX price is strong, raw materials are in demand.

The proportion of production costs is increasing; the growth rate of the downstream polyester industry is slowing down, the support for PTA demand is weakened, and the demand for PTA is weak.

The Planning Institute of petroleum and chemical industry made the above judgement in the article "China PTA industry development research and Outlook".

In this paper, the Planning Institute suggests that the government and regulators should strictly access conditions, improve the exit mechanism of backward production capacity, and strengthen industry regulation from the perspective of energy conservation, emission reduction, environmental protection and safety.

About 99% of China's PTA is used to polymerized PET polyesters.

China has become the world's largest polyester producer since 1999 and has been a net exporter of polyester since 2005.

In 2015, China's polyester industry has an annual capacity of 44 million 500 thousand tons, output of 35 million 280 thousand tons, net exports of 1 million 480 thousand tons, and domestic apparent consumption of 33 million 800 thousand tons.

PET polyester consumption is increasing rapidly, driving domestic PTA and its upstream raw materials.

Rapid increase in demand.

In 2015, the total capacity of PX in China was 13 million 630 thousand tons / year, and its output was 8 million 520 thousand tons, but its consumption was 20 million 50 thousand tons and net import was 11 million 540 thousand tons.

The supply of PX in the domestic market is insufficient, and a large quantity of imports can meet the needs of PTA production every year.

PTA production technology has also made great progress. The technology level of single unit scale, material consumption, energy consumption and other technologies has been rising.

With the deepening of reform and opening up, investment restrictions on foreign capital and private enterprises have gradually opened up, and a large amount of capital has entered PTA production field.

Under the combined action of various factors, China's PTA industry has achieved rapid development.

"Unlike oil refining, ethylene, aromatics and other petrochemical industries, China's PTA industry has no national industrial development plan.

Participants have observed and recognized the industry from their own perspective, and enterprises, governments, financial institutions and other aspects lack the overall understanding of the PTA industry situation.

The experts said.

Technological progress, decentralization of examination and approval, economic stimulus and credit easing are the main reasons for the explosive growth of capacity.

Although the overall capacity is overloaded, the rate of differentiation is obvious: as of June 2016, the total capacity of the PTA plant exceeded 50 million tons / year, and the average operating rate of the industry was 65%, but the start-up rate of some equipment with cost and technical superiority still exceeds 90%.

The research and Prospect of China's PTA industry development suggests that in view of the current market situation and development trend, PTA potential investors should invest prudently, avoid vicious competition, and strive to achieve win-win cooperation. At the same time, explore the way to resolve excess capacity through the way of "going out". The government and regulators should strictly access conditions, improve and implement the mandatory exit mechanism, and strengthen industry regulation from the perspective of energy saving, emission reduction, environmental protection and safety. When financial institutions approve new loans for PTA projects, they should carefully assess project risks and avoid repeated occurrence of bad loans on low competitiveness projects.