English Views: 2 Author: Site Editor Publish Time: 2021-10-13 Origin: Site
Supply: current polyester polymerization rate was above 81%, flatting with pre-holiday level. The regulation of energy consumption will decide the recovery of polyester polymerization rate and affect the launch of 2 million tons/year of new polyester capacity in the Q4. The polyester polymerization rate is estimated at 83%, 88% and 88% respectively in Oct-Dec.
Demand: the operating rate of fabric mills rapidly increased to around 70% after the electricity consumption control eased in Jiangsu during the National Day holiday but it may fluctuate substantially in Q4 if the consumption of electricity continues to be restricted.
Domestic demand was weak: In Jan-Aug, 2021, domestic retail sales of textiles and apparels only increased by 1.6% compared with 2019 level (which was at 2.9% in 2019).
Export demand was moderate: Exports of textiles, excluding mask, rose by 9% in Jan-Jul compared with 2019 level and ascended by 1 percentage point compared with 2018; Exports of apparels, excluding protective apparels, rose by 6% compared with 2019 level and moved up by 6 percentage points on 2018, mainly stimulated by the order transfer from Southeast Asia since Q4 2020.
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In summary, exports of textiles and apparels have peaked and gradually headed south, which hit the highest in Q1 2021, saw falling growth rate since Q2, while Southeast Asia witnessed rising growth rate.
With weak demand and firm cost, stocks of the whole value chain are likely to accumulate again if the run rate of upstream market rises after the regulation of energy consumption mitigated. However, price of downstream market may be hard to track the uptrend on feedstock market if demand weakens. If the control of energy consumption remains strict, stocks of the whole value chain are likely to reduce and price is expected to rise.
Focus: It is suggested to pay attention to the export orders for spring wear. Whether falling sea freight recently will favor the placement of export orders? In terms of supply side, the production curtailment resulted from the energy consumption regulation should be concerned. Supply and demand status will be reevaluated according to the actual implementation of policies.
Supply and demand: PX inventory is expected to increase in the fourth quarter.
Supply: Hengli Petrochemical has shut one 2.25 million mt/yr PX line in end-Sep for technological revamp lasting 3 weeks. Fujia Dahua has shut its 1.4 million mt/yr PX units for 45-day maintenance starting from Sep 26. Taiwan's FCFC plans to shut its 950kt/yr PX plant in Oct for scheduled maintenance lasting 3 weeks. In addition, Japan's ENEOS cut the operating rate of its 3.2 million mt/yr PX plants unexpectedly by 10%.
Demand: Downstream PTA plant maintenance would mostly take place in Oct, but would be limited in Nov and Dec.
Outlook: PTA plant operating rate remains low in the short term, and PX would still be oversupplied and the storage space for PX dwindles. However, some PX plants may cut run rates due to poor economics, and then PX-naphtha spread may get supported .
Focus: PX plant operations under high inventory as well as dual controls on energy consumption and intensity.
Supply and demand: PTA market will be largely balanced in October, but the pressure of inventory accumulation will gradually increase in November and December.
Supply: Energy Investment's 1 million tons/year and Sinopec Yangzi's 600,000 tons/year PTA units will restart after the holiday; restart of Honggang's 2.5 million tons/year PTA unit is to be determined; the restart of 2.5 million tons of Billion is postponed to mid-October; Hengli plans to maintain the No.3 and No.5 PTA units for maintenance in October.
Demand: polyester inventory pressure has eased slightly, but the terminal demand is weak under continued dual control policy and may not improve largely in the short term.
Outlook: PTA spot market liquidity is still relatively sufficient. In the short term, the PTA processing margin will be maintained at a high level due to the compression of PX-naphtha spread, and PTA prices will continue to climb up following the cost increase. However, with the restart of the PTA units in the later period, PTA margin may reduce under the accumulation of inventory.
Focus: the implementation of PTA plant maintenance plans.
Supply and demand: slow startups of new units; broadly balanced in Oct; clear inventory buildups in Nov-Dec
Supply: China domestic supply recovers slightly. Operating rate of all MEG units is around 60% and of coal-based units around 41%
Demand: polyester product inventories decrease slightly; end-use demand remains weak and the dual controls continue. The increase in MEG demand would be limited in short term.
Outlook: MEG prices are likely to track the move in costs; long-term supply will increase amid high prices.
