PX Profits Go Downhill And Market Panic Index Rises

PX has attracted much attention as one of the most profitable varieties in the polyester industry chain. However, with the addition of PX's new capacity in China, domestic self-supporting ability has been significantly improved, and PX profits have gone downhill.

According to monitoring, the peak value of PX in 2019 was $305.36 / tonne in February 16th, and more than 2000 yuan in profit margins for PX production of 1 tons of nuclear products. In May 17th, PX profit fell to -18.13 dollars / tonne, which was at a loss.

Strong, the domestic PX to the warehouse effect is obvious, the overall price trend is strong, profitability is enhanced, this link stagnation polyester industry chain most of the cash flow; however, since entering March, although the overall trend of crude oil is warm, give the naphtha and PX effective cost support, but with Hengli petrochemical two total 4 million 500 thousand tons of PX new capacity production (1#225 million tons / year production line in March 24th to produce qualified products, after load stable to 50-60% near operation; 2#225 million tons / year production line in May 11th officially put into operation, the load is 50% below), the domestic supply and demand pattern and participants mentality are all under obvious pressure, PX prices open strong unilateral downward trend, and then profit space concomitant obvious contraction, quickly dropped to below the cost level. PTA demand performance in 1-2 2019

Asia PX device change table in the second quarter

Affected by the current negative earnings situation, the market pays close attention to the operation of PX devices in Asia. As shown in the above table, the total changes in Asian PX installations in the second quarter involve a total capacity of 8 million 797 thousand tons, of which most of the change plans are expected to be set up at the beginning of the year, and not only the unexpected parking events of the Taiwan chemical fiber 3# device and the Japanese JX two devices are not planned, but the extension of South Korea's S-oil maintenance time and the Yishan repair process in Vietnam are ahead of schedule.

At the same time, as for the reduction of production, the current 1 million tons / year PX plant in Qingdao is expected to reduce its load to 60%. However, no specific downtime has yet been announced, while the production process of Han Hua chemical and Lotte is still in the planning stage, and the latter implementation needs to be traced.

Asia's PX price has increased significantly since its entry into March. In addition to the deterioration of its own supply and demand pattern, the pressure from Hengli Petrochemical Company on market confidence is also visible. Recently, along with the outbreak of PX overhaul in Asia, it is expected that PX prices will have a short wave of consolidation, but the impact will be far less than expected. The construction of the 4 million ton / year PX production line of Zhejiang Petrochemical Company is completed. It is expected that the output will reach production in the 4 quarter of this year, and the new pressure of Brunei Heng Yi project and Hainan 2 phase project will continue to impact the market, so the PX will remain in the middle and long term.