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Recently, Yizheng Chemical Fiber's PTA project with an annual output of 3 million tons was successfully put into operation. In addition, Ningbo Taihua's 1.5 million tons PTA unit was put into operation at the end of March and has been discharged. For the launch of PTA production capacity, the market attention is high, so how big is the impact on the industry?
Exacerbate the situation of overcapacity
In 2023, it will be in the second round of PTA rapid expansion cycle, and the total PTA production capacity in 2023 will exceed 80 million tons. In 2024, in addition to the 4.5 million tons that have just been put into production, a new PTA plant of 3.2 million tons in Sanfangxiang is planned to be put into operation by the end of the year, and it is expected to add 7.7 million tons of new production capacity in 2024. With the commissioning of new PTA devices and the obstruction of domestic PTA exports, superimposed on the rapid expansion of the downstream polyester industry in recent years, the industry competition pattern has intensified, and the growth rate of the demand side will slow down in the future.
Processing fees continue to fall
In the first quarter of 2024, the PTA processing fee fell below the average line in 2023 many times, reaching a minimum of about 250 yuan/ton. Under the influence of low processing costs, especially the commissioning of these two new units, will accelerate the clearance of some old production capacity, or will accelerate the elimination of old production capacity, and the current long-term shutdown capacity exceeds 7.5 million tons. PTA plants are also expected to increase their willingness to reduce production and production. According to statistics, the domestic PTA maintenance capacity was 6.65 million tons in April, and the planned maintenance in May was 6.1 million tons, and there are still many sets of long-term production units that may be overhauled annually.
Recent maintenance of PTA devices in China
| Manufacturers | Capacity(10,000 tons) | Overhaul situation |
| Sichuan Energy Investment | 100 | Parking on April 3 |
| Hengli Huizhou | 250 | Overhauled on April 7 |
| Jiatong Energy | 250 | Parking on April 10 for about 12 days |
| Yizheng chemical fiber | 65 | Parking on April 10 |
| Ningbo Taihua | 120 | Overhaul is scheduled for May, time to be determined |
| Dongying United | 250 | Overhaul is scheduled for May, time to be determined |
| Honggang Petrochemical | 240 | Overhaul is scheduled for May, time to be determined |
The price fluctuated in a narrow range
Since the beginning of this year, the overall price of PTA has fluctuated in a narrow range, and as of April 12, the average price of PTA market in East China was 5927 yuan/ton, down 0.05% from the beginning of the year. At the beginning of January, the downstream polyester did not support the demand for PTA poorly, and the price of PTA fell due to the wide correction of international crude oil. Subsequently, due to the low inventory of downstream polyester factories caused by the terminal replenishment market before the Spring Festival, PTA prices ushered in a wave of rise. However, after the holiday, the terminal resumed work, orders were not optimistic, the market spot circulation was abundant, and the price fluctuated and fell under the disappointment of supply and demand expectations. At the end of March, the cost side began to be supported, geopolitical conflicts fermented again, international oil prices continued to strengthen, and the routine spring inspection of PX is coming. At the same time, the demand for replenishment after the downstream consumption of the early stock turned optimistic, and PTA ushered in a slight recovery in stages. However, due to the pressure of new production capacity, prices have fallen recently.
What is the price trend in the future?
Xia Ting, an analyst at the business club, believes that the cost side will remain strong. This is mainly due to the relatively concentrated maintenance plan of PX units in Asia in the second quarter, coupled with the expectation of growth in oil blending demand in the United States, and the flow of some Asian goods to the United States, and the overall domestic supply level is expected to decline.
From a technical point of view, the price of PTA has crossed the 30-day moving average above the 30-day moving average since 2024/3/31. And 2024/4/7 estimates, the probability of a change in the operating situation (that is, the 7-day moving average crossing the 30-day moving average) in the next 7 days is 27.69%.
However, the decline in supply and demand is difficult to change. With the launch of new production capacity, the supply pressure continues to increase, and the inventory is still at a high level, so it is still necessary to pay attention to whether the PTA processing fee will continue to decline, forcing the PTA device to be overhauled unplanned. The current start of downstream polyester has climbed to a high level near 88%, and the room for improvement is relatively limited. After May, the traditional peak season of the terminal weaving industry will come to an end, and the weaving start-up rate may fall slightly. And the new polyester production capacity will enter the stage of slow release, and there is still uncertainty about whether it will be put into production smoothly. Therefore, it is difficult for the demand side to give the PTA market a relatively strong upward momentum.
On the whole, short-term costs are still supported in the face of PTA, and with the end of the traditional peak season and the gradual release of new production capacity, PTA prices will also weaken.