Recent PX Market Review And Forecast

In terms of Pxn: due to the unexpected shutdown of Hanbang unit, the spot flow of PX has become more relaxed. Since May, the oil price difference between PX and naphthalene has been greatly reduced. On May 29, the difference between PX and naphthalene oil prices dropped to 176.37 USD / T, with a decrease of 81.63 USD / T on a month on month basis. The cost side naphtha benefited from the high profit of the steam cracking industry chain and the impact of sufficient start-up of enterprises. The naphtha supply continued to be tight, and the price of naphtha soared. The price difference between PX and naphtha dropped to around $130 at the end of August. Although there has been a slight increase in recent years, with the steady increase of PX output of 1 million tons of new plant in Dongying Wilhelm Chemical Co., Ltd., and the resumption of production of 1 million tons of PX plant in Hainan phase II, the short-term PX supply and demand problem is still acute, and the offer of large factories is low, which is unfavorable to the repair of the difference between PX and naphtha oil price. However, the current enterprise has a large loss, and it is unlikely that PX and naphtha will continue to decline significantly. It is estimated that PX processing fee will be at the end of the year at the latest With the centralized production of new PTA units in 2021, the price difference between PX and naphtha is expected to rebound to more than $200 in the first quarter.

Supply: in terms of PX maintenance in the year, in addition to equipment problems, unexpected load reduction, shutdown, loss, and production reduction of individual enterprises, only a factory in Shandong, Luoyang Petrochemical and Tianjin Petrochemical overhauled, and the domestic operating rate of PX in the year was above 80%. From January to August, the average output of PX was close to 1.7 million tons / month, the average import volume was 1.18 million tons / month, and the average output of PTA was 4 million tons / month. From January to August, PX accumulated 1.74 million tons. After the increase of domestic production, the load reduction of foreign units occurred, mainly in South Korea, Singapore, India, Saudi Arabia and Taiwan, China.

In terms of demand, affected by the epidemic situation, the demand inside and outside the terminal was significantly suppressed. From January to August, the total PTA output was 31.98 million tons, an increase of 8.6 percentage points compared with the same period last year. However, due to the serious expansion of production at PX end, the total output from January to August was 13.47 million tons, an increase of 48.65 percentage points compared with the same period last year. At present, the profits of upstream and downstream polyester industry chain are generally low, the inventory is high, and the PX end has more losses.

Short term forecast: supply: the PX output is predicted to be 1.72 million tons in September and 1.875 million tons in October.

Valuation reference: after 50% load operation for one month, the new plant slowly rises to 70%. A factory in Hainan started normal operation.

Demand: PTA output is predicted to be 4.14 million tons in September and 4.21 million tons in October.

Valuation reference: assuming that Hanbang Overhauling for one month in October, Zhongtai in October for 20 days, Yizheng for 20 days in October, Livan can open in October.

In terms of supply and demand, it is still difficult to remove PX from storage before October. However, after the completion of PTA maintenance and the commissioning of new units, PX will begin to go to storage at the end of the year. In the first quarter of 2021, PX will continue to remove the warehouse, and the price difference between PX and naphtha will continue to be repaired.