The second half of 2019 has already started, and the global situation is changing rapidly. Sino-US relations, progress in reducing production, and geopolitical conflicts in the Middle East will all have a substantial impact on the entire polyester industry.

At the same time, in the face of the expectation of nearly 6 million tons of new investment, the supply and demand pattern of the PX market will be further changed, which will also lead to qualitative changes in the value chain transmission; but PTA will be released in the second round of demand peaks. Under the round of opportunities, it is expected to achieve an increase in industrial value; and MEG's new plant production schedule and destocking have become the focus of attention in the second half. It can be said that the first half of the polyester market is still a small wind and small waves, the real crisis in the second half!

PX: The contradiction between supply and demand is deepened, and the accumulated library pressure is enhanced.

In the second half of 2019, there will be a 7.3 million tons of PX new capacity production plan in the Asian market, and the progress of the new factory will also be well received by the industry.

At present, the next production unit will be Sinochem Hongrun's 800,000-ton PX production line. The unit was completed at the end of 2018. At present, it is involved in production planning and downstream customer negotiations and other related work, which is expected to be released within this month; It is the 1 million tons/year project of Hainan Refining and Chemicals Phase II. The plant started construction in September 2017. On March 15 this year, the PX plant and supporting projects were handed over, and the initial plan was put into operation in September. There is still a possibility of launching during the year. There is a phase I PX project of 4 million tons/year of Zhejiang Petrochemical Co., Ltd., which has the production capacity of Asia's large monomer PX. It officially operated the atmospheric and vacuum unit on May 20, and the production time is expected to be in the fourth quarter.

The above-mentioned new capacity production schedule is a time node, which will inevitably lead to a significant change in the domestic PX supply and demand pattern, which is directly reflected in the price trajectory.

In the past three months, China's PX supply and demand is relatively equal. On the one hand, although new projects have increased domestically effective output, the initial increase is effective, generally requiring a period of adjustment of about 1 month; on the other hand, domestic PTA installations are overhauled. The restart was even worse, and Xinfeng’s 2.2 million tons/year capacity released new demand, so PX supply and demand maintained a relatively balanced situation.

However, in the latter part of the year, the pressure on supply and demand in China's PX market will continue to ferment. Due to the continuous improvement of domestic PX self-sufficiency, the competition between imported goods and self-produced sources will also become hot. First of all, Hengli Petrochemical has been able to produce raw materials. Since July, it has closed all the import supply contracts, and only sporadic trading in the spot market; secondly, after the 1.5 million tons project of Hengyi Petrochemical Brunei, all the PXs produced by it have been shipped to China for its use. At the end of the PTA plant production, Zhejiang Petrochemical is also the "PX-PTA-polyester" integrated enterprise operation mode, so the PX import dependence will decline significantly, and the domestic PX accumulation pressure will increase.

PTA: September production will break through the new high in the year, and the equipment will be repaired into a large variable in the second half of the year.

In the second half of the year, PTA supply has an increase of 5.9 million tons: Xinfengming's new capacity of 2.2 million tons, Zhongtai Kunyu 1.2 million tons of equipment and Hengli Petrochemical's new capacity of 2.5 million tons. The main increase is the 2.2 million tons of new Fengming device that will be put into operation in September, which will push PTA production to a new high in the year.

The production of Zhongtai Kunyu and Hengli petrochemical plants is expected to be put into production at the end of 2019, with a high probability or postponed until early 2020, and the impact on production in the second half will be relatively limited.

In addition to the expected production capacity of the new supply at the supply end, the output variable is due to the maintenance expectations of the unit. In terms of PTA maintenance in the first half of the year, the PTA capacity that has not been overhauled in China totaled 23.55 million tons (of which 4.35 million tons of equipment had a short stop in the first half of the year), which became the large variable of the production in the second half of the year.

At the same time, far more than 14 million tons of unrepaired capacity in the second half of 2018, and most of the capacity maintenance time in August-September and December. Therefore, the increase in PTA production or the stage of maintenance due to maintenance.

From the demand side, the new capacity of polyester in the second half will reach 3.94 million tons. However, due to the significant decline in terminal demand year-on-year, it is expected that the polyester production plan will be postponed. Therefore, it is expected that the new polyester production capacity will not exceed 2 million tons in the second half of the year.

At present, according to the 90% start-up level, the monthly production of polyester may exceed 4.3 million tons, and the demand for PTA consumption will be around 3.68 million tons.

Ethylene glycol: In the fourth quarter, or facing greater challenges, industry earnings are difficult to achieve

In the fourth quarter, the supply and demand relationship of ethylene glycol will face a greater test than the first half of the year. The main reason is that the fourth quarter is a quarter in which China's new capacity is concentrated. In addition, foreign devices such as Lotte and Malaysian oil will be installed here. At the time of normal supply, after the centralized maintenance in the first half of the year, the equipment maintenance will be reduced in the second half of the year, and the operating rate will be significantly higher than the level of April-May. In addition, the polyester enters the traditional off-season, the supply increases, and the demand decreases. Next, the contradiction between supply and demand will be more prominent than the first quarter of the first half of the year.

With overcapacity in 2019, the surplus will become more apparent in the next few years. There are three ways to solve this situation. The first way is to develop high-speed polyester products to digest new capacity. Look, this approach is difficult to achieve. The second way is to open up new downstream (such as methanol to reverse the supply and demand pattern by increasing MTO demand) but at present, the new downstream is still difficult to find.

The above two ways can not solve the contradiction between supply and demand, then you can only reshuffle through the industry to replace the equipment with high cost and small production capacity, and achieve a new supply and demand balance, but through this way to the production capacity. The profitability of the industry is definitely difficult to achieve, and it must be achieved in the loss-making state of the whole industry. However, the ethylene glycol plant that was put into production in the previous period experienced a large profit in the previous years, and the capital advantage was relatively obvious, while the new device was advanced in technology and low in cost, but Without the accumulation of cash flow in previous years, the old and new devices have their own advantages, and the process of de-capacity will be very long.

In the second half of the year, the polyester raw materials market is “dangerous” and “machine” coexisting.

In the first half of 2019, the domestic PTA added less capacity, the plant started to increase slightly, and the output increased by more than 7% compared with the same period of last year. Domestic MEG production continued to grow rapidly, and the import volume also increased.

On the demand side, the start of polyester enterprises in 2019 is at a relatively high level, and the output of each variety continues to increase. The overall performance of the market is flat. Due to the poor performance of terminal orders, downstream enterprises mainly focus on on-demand purchases, while market transactions are only There is some warming up when the company replenishes the stock, but its duration is often shorter.

In terms of inventory, in 2019, both Zhengshang warehouse receipts and social inventories were higher than the same period of 2018; while MEG inventories continued to be at a high level and hit a record high several times.

According to the new capacity launch plan, both PTA and ethylene glycol will have a large amount of production to be launched in the second half of 2019, while downstream polyester companies and terminal weaving industry are under pressure in the country and international trade friction continues. It is difficult to see a significant improvement.

In the short-term, due to the overhaul expectations of domestic PTA installations and the large capacity of maintenance equipment, PTA supply will decline significantly in the short term, but in the medium and long term, PTA supply will be loose with the new production capacity; In the short-term, diols are subject to sustained high stocks, and their prices are unlikely to rise significantly. With the commissioning of new plants in the second half of the year, ethylene glycol will be under greater downward pressure.

In summary, the polyester raw material market in the second half of the year can be described as “dangerous” and “machine” coexisting. Although the overall demand market has been newly added, there are still doubts about the actual effective demand, and the macroeconomic environment is not optimistic. On the whole, the fluctuation of polyester raw material market is relatively slow, and the operation should be cautious.

Hai'an County Qinfeng Chemical Fiber Co., Ltd. relies on the professional power of single stream, the front-end quality inspection system and perfect quality inspection system ranks among the high-quality enterprise queues in the industry, specializing in the production of short pp, polypropylene staple fiber, polyester staple fiber and Functional polypropylene staple fiber, etc.