Supply Side Restricts PX Price Trend PX Enters Downstream Channel

As domestic PX projects come into operation one after another, PX, once known as the "king of profit" of polyester industry chain, has also fallen off the horizon recently. In April 17th, the Asian PX market closed at $1006.42 / tonne CFR China, compared with the previous trading day prices fell 36.08 U.S. dollars / ton, prices fell sharply.

PX, once uncommon, has been built up in the near future or entered the downstream channel.

PX plant has been put into operation one after another.

In March 24th, Hengli refinery's first set of PX plants produced qualified products, which had 2 million 250 thousand tons of capacity, and the current load remained at 5-6. In the future, there is still a plan to increase load. In addition to constant force, many private refinery giant PX devices are also being built in full swing.

According to data monitoring, the difference between PX and naphtha has been decreasing since March. Meanwhile, PX's profit (gross profit) also showed a sharp downward trend, with a drop of nearly 50%. In view of the fact that the PX capacity will increase significantly in the late period and the current PX-Nap spreads are still at a high level, the PX-Nap price differential will continue to be compressed, which will be the general trend.

PX how big is the price space?

With several private refinery giants coming into operation, the PX supply side will usher in a huge volume, while the downstream PTA has capacity expansion, but the new capacity can be very limited before the end of 2020, and the demand side does not have strong support. The downward trend of PX price is inevitable. The era of high profit will not go back, and the industry pricing mode will gradually turn from oligopoly to cost pricing.

The current round of PX expansion is similar to that of 05-12 PTA. In the long run, Asian pricing power will be spanferred to the domestic market. With the substitution of imports, there will be a round of reshuffle. The price difference between PX- and naphtha corresponding to the marginal cost of Japan and South Korea will be 340 US dollars / ton, which is expected to have strong support. However, it does not exclude that the stage will fall to the cash balance point of US $290 / ton, and the current price declines are 140 US dollars / ton and 190 US dollars / ton respectively. Specifically, this year, taking into account the scale and pace of capacity release, we expect that the slump will not occur. But in the quarterly view, the price center will gradually descend to a minimum price of 350 US dollars per ton, and the device that is the first to be put into operation is expected to enjoy a high profit at the end of the boom.

To sum up, the cost surface naphtha and the crude oil increase are currently PXN low to 421.92 US dollars / ton, and there is still a trend of diminishing follow up. Downstream PTA night plate or down PX, is still the supply side constraints PX price trend, PX is expected to fall hard to rise. (source: Niu Qian net, founder metaphase)