on the eve of the Spring Festival, the price of PTA to break the tepid situation, break in one fell swoop for more than a month interval oscillation.

After the downstream polyester plant “off” market is PTA market adds a fire PTA, the center of gravity of the price rising. The recent international oil prices are still at high oscillation, PX also maintains a stronger trend, strong cost side to provide strong backing for the PTA price, the short-term adjustment after the PTA is expected to return to the strong situation.

The cost of supporting strong

At the end of January, Japan and South Korea, two sets of equipment accident shutdown prompted Asian PX pull up sharply, although South Korea Ulsan 400 thousand tons of SK device has been restarted, but PX still strong reduction, FOB Korea price in $900 / ton wandering, PX and naphtha spreads back to 400 dollars / ton, PX production and cash flow at $50 / ton. At the end of the cost of the positive stimulus, PTA pull up the cost to 5500 yuan / ton, the average spot processing profits from negative to positive.

The two quarter PTA sales season is small, the market rumors that the first half of this year, the Far East and Xianglu Petrochemical may have to restart the program, will advance preparation, the market demand for PX increase. However, at the same time, raw material PX will usher in the peak overhaul, and relates to a device for high production capacity reached 6 million 870 thousand tons, accounting for 15% of the total capacity of PX in Asia over the same period, two years before the repair capacity of about 2000000 tons. The gap between supply and demand expansion will push up the cost of PTA, the production of PX cash flow will continue to expand.

The expected strong demand

After 2016 the main production of polyester industry, polyester filament stock will fall sharply, the fourth quarter polyester inventory days are basically in single digits, which constantly refresh the record low. From the end of last year to start this year, the polyester market to maintain high enthusiasm, in terms of price or sales are showing good situation. During the Spring Festival this year, although polyester plant maintenance strength, operating capacity of 10% higher than last year, but the low stock market has laid a good foundation, holiday effect is greatly weakened tired library.

Data show that this year’s festival, FDY, polyester POY DTY Inventory were 12, 18, 24 days after the Spring Festival last year, respectively 8, 2, 4 day low. The Spring Festival this year after the start of the polyester market across the board, all varieties of basic price put up 300 – 500 yuan / ton, with lower orders increase, PTA demand is expected to move up again.

The processing fee is significantly higher

In 2016 only 2 million 200 thousand tons of domestic hanbon petrochemical equipment production, overcapacity situation has been alleviated, but the profit of PTA production has not improved, the spot processing fees fall again. In 2014 the average spot processing fee is 588 yuan / ton, in 2015 reached 503 yuan / ton, last year is narrowed to 475 yuan / ton.

However, since 2017, the industry chain led to the good spot, profits increased gradually, the average processing cost during the year has risen to 570 yuan / ton, the processing fee is 900 yuan / ton relatively high. The higher profits will contain some more power, short term price or needs some adjustments.

However, in the long term, the upstream PX market overhaul peak, tight supply is expected to boost the cost of PTA increase, while the downstream polyester demand replenishment pull PTA positive consumption. The downstream good superposition, PTA price is expected to rise again.