As one of the most profitable varieties in the polyester industry chain, PX has attracted much attention in the market. However, with the introduction of new PX production capacity in China, domestic self-sufficiency has improved significantly, and PX profits have officially gone downhill and downhill.
By May 16, 2019, the profit value of naphtha-based PX process line had officially broken through the cost level, reaching – 9.49 US dollars per ton. It had been one and a half years since the last negative profit occurred.
According to monitoring, the peak profit of PX in 2019 was US$305.36 per ton on February 16, and the profit margin of nuclear production of 1 ton of PX products was more than 2,000 RMB. By May 17, the profit value of PX fell to US$18.13 per ton and was in a loss state. From January to February 2019, PTA demand showed strong performance. The effect of domestic PX depot was obvious. The overall price trend was strong, and the profitability was enhanced. Most of the cash flow of the polyester industry chain was depressed in this link.
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However, since March, although the overall trend of crude oil has been warmer and naphtha and PX effective cost support has been given, with the launch of Hengli Petrochemical’s two new production capacity of 4.5 million tons of PX (1
Domestic supply and demand patterns and participants’mentality are under significant pressure. PX price has opened a strong unilateral downward trend, and then profit margin has contracted significantly, rapidly falling below the cost level.
Asian PX Device Change Table for the 2nd Quarter
Influenced by the current negative profit situation, the market closely monitors the operation of PX devices in Asia. As shown in the table above, the changes of PX devices in Asia in the second quarter involve a total capacity of 8797,000 tons. Most of the changes are expected to be made at the beginning of the year, not only the accidental parking of Taiwan Chemical Fiber 3# device and Japan JX device, but also the S-oil maintenance in Korea. Interval extension and advance maintenance process in Yishan, Vietnam.
At the same time, concerning the reduction of production, only Qingdao Lidong 1 million tons/year PX plant is expected to reduce the load to 60%, but the specific reduction time has not yet been announced, while the reduction process of Hanhua Chemistry and Lotian Chemistry is still in the planning stage, and the later implementation needs to be tracked.
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PX prices in Asia have fallen sharply since March. In addition to the unexpected deterioration of its supply and demand pattern, Hengli Petrochemical has exerted general pressure on market confidence.
Recently, with the outbreak of PX overhaul process in Asia, it is expected that PX price will have a short wave of consolidation. However, its influence may be far less than expected. The PX production line superimposed by Zhejiang Petrochemical Company has been built up. It is expected to reach production in the fourth quarter of this year, and new pressure from Brunei Hengyi Project and Hainan Phase 2 Project will continue to impact the market. Therefore, PX will remain empty in the medium and long term.
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