Will PTA plants shut for maintenance intensively under loss? – ChinaTexnet.com
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Will PTA plants shut for maintenance intensively under loss?

2022-03-21 13:34:40 CCFGroup

Crude oil futures continued to rise, and the profit of polyester industry chain products continued to be compressed. In addition to PET bottle chips and DTY, all the other products are in a loss. In particular, PTA-PX margin has dropped to negative values for two consecutive days. If acetic acid cost is considered, PTA processing cost has dropped to -200yuan/mt, a new low in history. Under the influence of such low processing cost, will more PTA producers shut the units for maintenance in the later period?

 

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Due to the continuous decline of margin, more PTA producers announced maintenance plans since mid-February. Yisheng, Hengli, Yizheng, Energy Investment and Fuhaichuang all have production cut plans in March and April. The supply has started to shrink and PTA inventory gradually reduces in March. However, the short-term sharp rise of raw materials, and the constrained terminal demand put the PTA margin into negative territory. In the actual production process, PTA producers usually purchase some PX spot in addition to the contract goods. Due to the ship schedule, this part of spot is purchased in advance. In addition, most PTA plants also have raw material inventory, therefore, short-term loss is lower than the calculation based on spot.

 

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Secondly, many PTA plants are integrated with capacity accounting for 75% of the total capacity of PTA. The profit of PTA and upstream&downstream balance will both be taken into consideration by this part of companies.

 

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In addition, if the PTA producers choose to shut the unit out of plan, the PX storage capacity should be considered. After all, the storage capacity of the PTA plant is limited. If the PX contract volume is cancelled now, the possibility of not being able to buy it later also exists. Besides, the arrangement of maintenance personnel and the arrival of some accessories or equipment should also be considered. In addition, PTA plants also faces the problem of downstream contract delivery.

 

The current PTA plants under operation now have relatively strong competitiveness after the fierce competition in 2019-2021. In the process of raw material rise, the PX inventory prepared earlier has a value-added premium. In addition, the large PTA producers with integrated units are relatively cautious about maintenance plans. Therefore, there is no new maintenance plan announced. However, if the PTA production is in a continuous loss for a long time, it does not rule out the possibility of PTA plant overhaul or output reduction.

 

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