Review Of PX Industry Chain In July 2019 And Prospect For August

The first part is brief introduction.

According to LIAN gold monitoring, the overall shocks of PX upstream and downstream products were weak in July, and the international crude oil shocks were not oriented. The general mood of the industry chain was general. However, the xylene market was tighter in the past month, and the performance of the market was more intense. The PX market was tight and deadlocked. Several sets of PX devices were still being overhauled, and the production loss was very high, but the PTA market was weak, PX buying sentiment was generally low, and the polyester raw material market was weak, which made the field mood pessimistic, while the downstream polyester production and terminal orders were too few, and the demand performance was depressed.

Table PX and related products ranking in July

Source: LIAN

The second part is the analysis of the main products in the PX industry chain.

Source: LIAN

Isomerization of xylene

In July, the domestic xylene shock was strong, and the Sino US trade relations and the easing of the relationship between the United States and Iran were lifted. In the first half of the year, crude oil price shocks rose, giving the market a boost, xylene price rebounded, but due to the relatively concentrated port arrivals at the beginning of the month, the overall purchasing power of the xylene was relatively slow. Although the PX-MX price difference is narrower in the month, the PX factory's lack of enthusiasm for external production, market commercial oil transfer activities for xylene purchasing enthusiasm and lack of initiative because of price reasons, but businessmen have a lot of views on xylene demand expectations, and the medium and long-term supply will still be tight, so the sellers are reluctant to sell, and the price is very heavy. In the second half of the month, despite the weak shocks of crude oil, the domestic demand for xylene did not improve significantly, and the market turnover was relatively low. However, many views raised the market to buy gas in the long run, and the futures price rose to boost the spot formation, which made xylene price go further higher and hit a new high in the year.

PX

This month, the Asian PX market was sorted and its direction was not strong. As of the end of the month, Asian PX estimated 813 US dollars / ton FOB Korea and 832 US dollars / ton CFR Taiwan / China, down 17 US dollars / ton from the end of last month. Stronger, and Saudi Amy set up 700 thousand tons / year PX device accident maintenance, expected to overhaul 30 days, and Hainan refinery PX new plant put into production time delay, the Asian PX PX overall supply tightened, the PX purchase enthusiasm is good, the middle crude oil falls sharply, the cost supports the collapse, the merchant mentality changes cautiously, but several sets of PX devices are still under repair, the supply is still tight, the air supply is still tight, the downstream PTA market continues to fall for several days, resulting in the PX buying intention weakening, the business quotation loose, but PX profit has already been in the small loss state, the production enterprise gives the profit space limited, the PX does not fall down with the drop, the end of the month is disadvantageous collation primarily. At the beginning of the month, market sentiment was relatively stable, and the industrial chain fluctuated little. Sinopec announced that the PX settlement price in July was 6935 yuan / ton, up 155 yuan / ton from last month's settlement. In July, the average price of CFR in Taiwan was 849.5 US dollars / ton, a 2.4% higher than the annulus rate, 15.6% lower than the same period last year, the lowest price appeared in July 30th of 831 US dollars / ton, and the highest price appeared in July 12th of 888 US dollars / ton.

PTA

This month, the domestic PTA market has been put up first and the overall trading situation is generally. Earlier this month, stronger crude oil and the easing of Sino US trade war led to a sharp rise in the PTA market, while some suppliers were cautious in shipment and cash in circulation was tight. As oil prices fell, PTA futures were withdrawn from large capital, futures fell sharply, but the supply was good, making the current base strong, and the spot price fall was limited. On the 4 day, the PTA market continued to fall. The main contract was 1909 down, and the East China main port negotiated 6760-6800 yuan / ton. With Fuhai set up to postpone maintenance to 9 days, and crude oil rose, and market rumors that the mainstream supplier contract will soon be reduced, the PTA futures market rose sharply, and the spot circulation was tight, and the futures rose. But due to the weak demand for downstream, the terminal orders did not improve. The downturn in demand led to a decline in the PTA market. On the 18 day, the main port cargo in East China discussed 6250-6450 yuan / ton. In late June, due to the fermentation of a trading company explosion, some PTA enterprises had limited delivery, so the futures market had a strong decline, and the futures market showed a sharp decline. On the 22 and 23 days, there were two consecutive downturns, which caused the downstream polyester and terminal panic to stop. The demand continued to be depressed. Under the pessimistic mood of the terminal, the PTA market continued to be in a weak position. As of 30 days, the average price of the East China PTA market in July was 6263 yuan / ton, a rise of 9.07%, a year-on-year fall of 2.77%. The highest price appeared at 6900 yuan / ton on the 2 day, and the lowest price appeared on 5420 yuan / ton on the 30 day.

PET chip

In July, the polyester chip market was wide concussion. At the beginning of the month, crude oil futures bottomed out, domestic chemical products futures pulled up, and raw material PTA market rose strongly, cost push effect enhanced, and polyester chip factory without shipment pressure, so factories actively pushed up shipment, and the market center of gravity was higher. Subsequently, the raw material PTA market dropped sharply and cost support was weak. At the same time, downstream factories avoided the risk of devaluation of high priced stocks, and the rate of opening up of the industry continued to decline, and demand shrank sharply. Polyester chips slump up and downstream, polyester chip factory inventory is also growing, so polyester chip factories have to actively reduce sales promotion, so polyester chip market transaction center of gravity fell sharply. By the end of this month, the downstream slicing and spinning enterprises should buy raw materials at a low price, the production and sales volume of polyester chip market, and the pressure of loss will not be reduced, so as to jointly push the polyester chip factory to push up shipments actively, and the focus of the market will steadily increase. Up to now, the average price of polyester chip market in East China is 7388 yuan / ton, up 7.73%, up 7.46% compared with the same period last year, the highest price appeared in July 3rd 8100 yuan / ton, the lowest price appeared at 6800 yuan / ton on 29 days.

PET bottle flakes

This month, the domestic bottle grade PET market has been advanced and suppressed. At the beginning of the month, due to the easing of trade war between China and the United States, the market mentality was lifted. Raw material PTA futures touched up the daily limit for two consecutive days. Under the promotion of cost advantage, the manufacturers of bottle flakes began to substantially increase their raw materials, and the price of East China market rose to a maximum of 7950-8100 yuan / ton. Bottle manufacturers have more cash resources, and mainstream manufacturers are starting to issue orders for 8-9 months. However, the demand for the downstream has slowed down, the buying and selling is cautious and wait-and-see, the market volume has declined sharply, and the weak demand has dragged down the market rally. After maintaining the rally for only two days, the PET market gradually declined from the beginning of 3. The PTA market of polyester raw materials has entered a declining channel. When the cost is facing a negative pressure, the manufacturers of bottles and bottles have steadily lowered their prices. Under the market downturn, the downstream demand continues to turn pale, buying enthusiasm is low, and the market trading atmosphere is low. By the end of this month, the price of East China market fell to 7050-7200 yuan / ton. In late days, with the market price falling to a relative low level, the downstream factories have increased the volume of goods and the volume of the market has increased. As of 31 days, the average price of water bottles in East China in July was 7539 yuan / ton, up 4.19%, up 19.73% from the same period, the highest price in July 1st was 8100 yuan / ton, and the lowest price appeared in 7000 yuan / ton on 26 days.

The fourth part forecasts and prospects.

Jin Lian Chuang predicts that the PX industry chain will maintain a concussion trend in August. The environment is weak. The business mentality is cautious. Several sets of PX maintenance devices have been restarted. In addition, the Sinochem Hong PX new plant will be put into operation, the supply will continue to increase, PTA will follow the trend of PX, while the downstream polyester will start or maintain its low position, and the terminal order will be difficult to discharge. The following is the outlook for the future of major products:

PX

Jin Lian Chong predicts that the Asian PX market will be weak in August 2019. Next month, 3 sets of PX maintenance devices will be resumed in China, and the new Sinochem PX new device is expected to be put into operation. The domestic supply will increase significantly. However, the profit margin of PX is near the break even and small losses. The profit intention of the enterprises is not strong, while the downstream PTA profit is acceptable. The demand for PX is still stable, and the Asian PX market shock is expected to be weak next month.

PTA

Jin Lian Chuang expects the PTA market in August to rise or suppress. Raw materials PX repair device is about to resume restart, and SINOCHEM Hong Run PX new device is expected to be put into operation, domestic supply will increase significantly, making the PX market weak, may cost side support is weak; from the supply and demand side, some PTA factory in August still have device maintenance, spot circulation is tight. Although the weather is hot, the downstream polyester and terminal weaving plant is still in a state of parking, but there is still a need for replenishment. In the case of a significant reduction in processing fees, the PTA market has strong resilience. It is expected that the PTA market will continue to grow in August.

Polyester PET

Jin Lian Chuang expects August polyester PET market or narrow oscillation operation. Raw materials PTA market or advance support, cost support generally; but the downstream beverage industry is still in the traditional consumption season, and the downstream polyester industry will gradually usher in the traditional peak season of consumption. It is expected that in mid August, the number of new orders will increase slowly or the demand side is expected to gradually recover. At the same time, the polyester PET plant has no inventory pressure, and the industry operating rate or the drop in space is still low. The market supply pressure is not large. In view of the overall situation, the polyester PET market will remain unchanged or maintain a narrow trend of volatility. We need to pay close attention to the changes in upstream raw materials and the recovery of terminal demand.