Polyester industry chain is optimistic about PTA's profit next year

Recently, Hengli Co., Ltd. announced that its subsidiary company Hengli Petrochemical intends to invest 2.988 billion yuan to build a PTA-5 project with an annual output of 2.5 million tons. Expanding production capacity is undoubtedly optimistic about the future profit prospects of PTA.

Since August this year, the profitability of the polyester industry chain has shown a substantial expansion. Among them, the prices of PX, PTA and polyester filaments have increased by 14%, 33% and 16% respectively. The profit of PTA+ polyester singleton has nearly doubled. It has also grown substantially. However, the profitability of this round of PTA and polyester is far from high, and it is expected to remain high next year.

Since last year, the most unexpected expectation of the polyester industry is demand growth. From the beginning of last year to the first half of this year, it has maintained a growth rate of around 15% for one and a half years. The core reason for the demand exceeding expectations is to replenish stocks. The polyester industry has always been buying. The price has continued to fall in the past few years, and all the downstream links are desperately going to inventory. With the establishment of the price increase trend in 2017, the downstream has begun to replenish stocks, especially the increase in oil prices has stimulated the strength of replenishing stocks. Therefore, as long as the price trend is still there, the demand growth rate will not be easily slowed down in the short term.

Looking into the future, from the perspective of the cycle, the price increase of oil prices is very strong, so the polyester industry chain cycle is only the first half, but it is far from over. In terms of the polyester industry chain, before the end of 2019, the most Optimistic about PTA.

The PTA output since May this year is not enough to meet the demand of downstream polyester, which has led to the continuous destocking of PTA in the past 4 months. This is also the direct cause of this round of surge. At present, the nominal capacity of PTA is very high, but there are nearly 1000. The long-term parking of 10,000 tons of equipment, the real effective capacity is only about 43.8 million tons, corresponding to the latest weekly production of about 780,000 tons, the operating rate has reached 90%. But even so, it is still destocking, the current inventory is only 730,000 tons It has reached a historical low level and has strong support for price formation. In the future, although the PTA plans to add a lot of new capacity, the new supply that can really land is very limited. By the fourth quarter of 2019, only the original Xianglu 1.5 million tons and Sichuan 晟Up to 1 million tons of equipment is likely to resume production, while polyester continues to expand production, and the growth rate is higher than PTA, so supply and demand will be more tense. Even if the price is adjusted back, the range is probably limited.

In contrast, PX, the main reason for PX's high profit in the past few years is the lack of domestic supply, relying heavily on imports, and the dependence on imports is higher than 50% for a long time. Looking ahead, there are still 20 million tons and 7 million tons of PX capacity at home and abroad, supply and demand. Unbalance will drive profitability down.