The Contradiction Between Supply And Demand Of Domestic PTA Deepens The Trend Of Cost And Processing Fee Downward

In recent years, the PTA industry chain has been developing continuously, and the upstream and downstream processing profits of the industry have increased along with PX PTA、 The supply and demand of polyester end have changed greatly. PTA has gradually transited from a situation where supply exceeds demand and processing profits are relatively rich to a situation where supply exceeds demand and processing profits are compressed.

From 2019, PTA has officially entered a rapid production increase cycle. In 2019, Sichuan Shengda 1 million tons/year and Xinfengming 2.2 million tons/year PTA plants were successfully put into production at the end of May and October this year. The next 1.2 million tons/year of Xinjiang Zhongtai, which is expected to be put into production on December 20, and the 2.5 million tons/year of Hengli Phase IV, which is expected to be put into production on December 28, are also attracting market attention. At that time, PTA capacity growth will reach a high of 15%. The rapid increase of production capacity has greatly compressed the industry's profits, and the processing cost of PTA has also decreased from the average processing cost of 1187 yuan in the first half of the year to 480 yuan, a decrease of more than 59.56%. PTA price also dropped from the average price of 6314 yuan/ton in the first half of the year to 4835 yuan/ton at present, a decrease of 23.42%.

Figure 1 PTA Price and Profit Trend

Source: Longzhong Information

With the continuous launch of new capacity, both PX and polyester plants have entered the edge of loss, and PTA processing fees may further reach a new low in the later period. According to Longzhong Information, the processing fixed cost of Hengli Petrochemical's latest Line 4 unit is only about 350 yuan/ton. Therefore, although the current PTA processing profit is at a low level within the year, there is still some room for PTA to reduce processing fees and costs in the environment of rapid capacity expansion.

The processing cost of PTA device is often affected by the device scale, technology, investment cost and other factors. According to the current processing cost of various enterprises, it is mainly divided into three categories. One is that the scale is less than 1 million tons, and the processing cost is about 700~900; The second type is about 100~150, which is mainly put into production after 2010, with processing costs of about 600~700; In the third category, the processing cost of those with a scale of 2 million tons and above is between 400 and 600, and some of them can be controlled below 400. Of course, some small devices have lower processing costs than similar devices because of lower depreciation and other costs.

   Table 1 PTA Mainstream Production Indicators

time	Unit scale (10000 tons )	PX Unit consumption (ton)	Unit consumption of acetic acid (ton )	Unit energy consumption (yuan )	Processing cost (yuan)
two thousand year	30-60	zero point six six	zero point zero four five	three hundred and twenty-five	700-800
two thousand and five year	60-70	zero point six five	zero point zero four five	one hundred and eighty	700-750
two thousand and ten year	90-110	zero point six five five	zero point zero four	one hundred and fifty	600-700
two thousand and fifteen year	120-220	zero point six five five	zero point zero three seven	one hundred and thirty-five	500-600
two thousand and twenty Year E	200-250	zero point six four four	zero point zero three zero	one hundred and twenty-five	350-550

Source: Longzhong Information

From 2000 to the end of 2019, with the upgrading of refining and chemical integrated devices, PTA device technology has been greatly improved and updated, and the capacity of the device continues to expand, from 300000 to 600000 tons in 2000 to 2.2 million tons of Ruxin Fengming and 2.5 million tons of Hengli. The unit consumption level of PX has also decreased from 0.66 yuan to 0.655 yuan, the unit consumption of acetic acid has also decreased from 0.045 yuan to 0.03 yuan, and the processing cost has also decreased from 700-800 yuan to around 400-600 yuan at present. There is no doubt that among PTA's device capacity, PTA enterprises with more than 2 million tons of devices, such as Yisheng, Hengli, Xinfengming, will also have the lowest processing cost.

At the end of the year, 10.8 million tons/year of new PTA devices will still be put into production in 2020. The introduction of new production capacity will inevitably increase the supply side of PTA and change the supply structure. Next, with the gradual expansion of cash flow loss area of downstream polyester factories, the vacation time of polyester factories and weaving enterprises will be further advanced. In the later period, under the expected environment of weakening supply and demand of PTA, the pressure of accumulation of PTA in the future will be greater. At the same time, the future PTA processing fees will also tend downward.