PTA Weekly Market Report 2022

contents

1. Summary of current market situation...................................................…2

2. Forecast of the next market trend...................................…3

3. Charts and detailed data............................................................4

3.1 Summary of upstream PX market...................................…4

3.2 Analysis of PTA's own supply...................................…5

3.3 PTA futures market conditions...................................…6

3.4 Summary of Downstream Polyester Market......................................…7

1. Summary of current market situation

Figure 1 Profit and loss chart of PTA production in 2021-2022

time	Highest (yuan/ton)	Minimum (yuan/ton)	Weekly average price (yuan/ton)	thursday price(Yuan / ton)
last cycle	5545	5345	5474	5510
this cycle	5340	5035	5164	5095
Quote change	-3.70%	-5.80%	-5.66%	-7.53%

     Table 1 PTA weekly price comparison table

During this cycle (20221202-1208), the PTA market rebounded slightly after a wide decline, and the overall market price closed down. Due to the weakening of cost-side support and poor supply and demand, the market trading atmosphere was relatively general during the week. As of December 8, the average spot price of the PTA East China market in this cycle was 5,164 yuan/ton, an average price drop of 310 yuan/ton, or -5.66%, from the previous cycle (2022111125-1201). From the perspective of cost, during this period, the Western price limit on Russian oil and the ban on seaborne oil came into effect. OPEC+ maintained the established production reduction plan. , but the inventory of refined oil products increased sharply, and international oil prices fell sharply during this period, hitting a new low for the year, which did not provide good support for the chemical products market. From the perspective of raw material PX, the new PX device Shenghong 1# 2 million tons and Weilian Chemical 2# 1 million tons are gradually mass-produced, the supply of PX continues to increase, the overall PX market is light, and the market price keeps falling. On December 7th, the Asian PX CFR price in Taiwan/Mainland China fell to 890 US dollars/ton, equivalent to PTA cost to around 4,600 yuan/ton, and the PTA processing fee was adjusted to around 400/ton, which shows that the support of raw materials is weak. From the perspective of PTA's own supply, short-term PTA starts fell to around 66.56%, which was about 2% lower than that on December 1. In terms of PTA units during the (20221202-1208) period, the 650,000-ton unit of Yangzi Petrochemical 2# began to shut down for a long time, and the 7.2 million-ton unit of Yisheng New Materials 1# and 2# dropped to 80% on December 2, compared with 8.5% before. conform to operation

The 350,000-ton unit of Chemical Fiber 1# was restarted to full-load operation on December 7 as planned, after the unit had been overhauled in early November; Weilian Chemical’s 2.5 million-ton new plant is still under commissioning, and Tongkun Jiatong Petrochemical’s 2.5 million-ton PTA new The commissioning of the device has been delayed. On the whole, the supply of PTA remained low during the (20221202-1208) period, with little change.

From the perspective of downstream demand, during the period (20221202-1208), the start of polyester production dropped from 74.84% to around 72.83%, the average weekly load was 73%, and the demand for PTA was 921,100 tons, a month-on-month decline of 31,700 tons. Although the profits of polyester factories have improved, the supply pressure is still high, the inventory is still high, the terminal weaving stoppage continues to increase, and the overall order situation is sluggish. Most downstream companies mainly focus on withdrawing funds, and the demand for PTA is weakening.

On the whole, the cost of crude oil fell by more than 10% during this period, the weakness of the raw material PX is hard to change, and the supply and demand of PTA itself is weakening. Therefore, under the superimposition of multiple bad news, the PTA market fell sharply during the cycle. From the perspective of the market outlook, the short position of crude oil at the cost end will be stronger next week, and the raw material PX will continue to be dragged down by bearish fundamentals. PTA’s own supply and demand will not be favorable for the time being. It is expected that the PTA market will move down next week. It is necessary to pay attention to the trend of international oil prices, changes in PTA equipment and downstream demand.

2. Forecast of the next market trend

driving factors	next forecast	driving direction
crude	In the absence of favorable support in the market this cycle, crude oil pricing tends to be guided by the bottom. At present, there are two support points for the price bottom that the market can refer to. One is the U.S. Department of Energy’s repurchase of strategic oil The reserve price is US$67-72/barrel, and the second is the floor price of US$60/barrel set by the West for Russian oil. We believe that the support of crude oil around US$72/barrel is still solid at present, and Russia may still take countermeasures or cut production directly due to sanctions, which constitutes short-term support for oil prices, and crude oil futures prices may be revised upwards moderately in the next cycle due to rising supply risks , US crude oil WTI may return to around 75 US dollars / barrel, but medium and long-term crude oil assets are still facing the pressure of demand destruction under the risk of economic recession. It is expected that oil prices will return to decline after short-term consolidation. According to foreign media sources, China will fully open its borders on January 9, 2023, but the market has already priced in the benefits of China's opening up in advance, and it is no longer able to provide the necessary support for the international oil market in the short term.	neutral
supply	There is no maintenance and restart plan for the next cycle of equipment. The commissioning of Weilian Chemical and Tongkun Jiatong PTA new equipment has been postponed. The overall supply is expected to remain low in the next cycle.	neutral
need	The load of polyester in the next cycle is expected to remain weak and stable, but the terminal demand is still declining, and the negative feedback transmission will continue to drag down the demand for PTA.	bearish
comprehensive judgment	From the perspective of expectations, in the next cycle, the trend of the crude oil market is expected to be mixed, the raw material PX will continue to be weak, the support of the cost side is limited, and the supply and demand of PTA itself will not be favorable for the time being. It is expected that the center of gravity of the PTA market will move down slightly in the next cycle. It is necessary to pay attention to the trend of international oil prices, the maintenance of PTA equipment and the downstream demand.

    Table 2 Market Trend Forecast for the Next Period

3. Charts and detailed data

3.1   Summary of upstream PX market

date	WTI	Brent	PX (FOBSouth Korea)	PX (CFRTaiwan/China)
30/11/2021	80.55	85.43	896.92	916.92
07/12/2022	72.01	77.17	870	890
Quote change	-10.60%	-9.67%	-3.00%	-2.94%

      Table 4 PX and Crude Oil Weekly Price Comparison Table

Figure 2 2021-2022 PX price and profit map

During this cycle (20221202-1208), the Asian PX market as a whole continued its downward trend, the market price was weak and hard to change, and the overall market buying momentum was weak. From the perspective of the upstream market, the international oil price has fallen sharply during this period, and the support for the PX market is not strong, and the direct raw material naphtha market is not optimistic. The price fell sharply. As of December 7, the price of CFR Japanese naphtha was US$622.5/ton, which was a decrease of US$63/ton, or -9.19%, compared with last Thursday's external price. The price of PX in Asia fell less than the market price of raw naphtha, so the overall PX-NAP price difference rose slightly. As of December 7, PXN closed at 267.5 US dollars / ton, an increase of 26.67 US dollars / ton from the price difference on December 1. PX integration Slight improvement, but overall still lower than the theoretical profit and loss line of 280 US dollars / ton.

From the perspective of supply, as of December 8, domestic PX starts adjusted to 76.01%. During the (20221202-1208) period, in terms of domestic installations: Shenghong’s 2 million tons/year PX new device is operating at around 60%; Weilian Petrochemical’s 1 million tons PX device started production on November 29, and the current load is around 70-80% . The total production capacity of PX has increased to 36.04 million tons per year during this period, and the follow-up Zhenhai refining and chemical plant is about to restart. The overall PX supply continues to increase, and the market spot is relatively abundant.

From the perspective of downstream demand, the PTA futures market first fell sharply and then rose slightly during the period of 20221202-1208. During this period, the start-up of PTA did not change much, but the load of major polyester factories continued to decline, and the terminal demand was relatively sluggish, which still had a negative impact on upstream transmission. From the perspective of price, the Asian PX market will run downwards during this period. As of December 7, the external market time is as of December 7. In terms of Asian PX prices, CFR China Taiwan/Mainland is US$890/ton, and FOB Korea price is US$870/ton. The settlement price of PX Sinopec in November was 8,120 yuan/ton, a decrease of 730 yuan/ton from the settlement price in October; the listing price of PX Sinopec in December was 8,300 yuan/ton, a decrease of 300 yuan/ton from the listing price in October.

From the perspective of the market outlook, the crude oil group believes that the next cycle may be moderately revised upwards due to rising supply risks, and US crude oil WTI may return to around 75 US dollars per barrel, but medium and long-term crude oil assets still face the pressure of demand destruction under the risk of economic recession. It will return to the downward trend after short-term consolidation, and the support for downstream chemicals is limited. With the gradual mass production of new PX devices and the restart of some pre-overhaul devices, the incremental supply and demand will be weak and stable. It is expected that the PX market will adjust slightly and weakly next week. It is necessary to pay attention to the trend of international oil prices and the commissioning of new PX devices.

3.2 Analysis of PTA's own supply

Company Name	Capacity (10,000 tons)	Device change	Remark
Fu Hai Chuang	450	12.1 began to reduce the negative to 50 % operation	recovery pending
Yisheng New Material 1#2#	720	12.2 began to drop to 80 %	Previously 9.5 % of the operation
Yangzi Petrochemical 2#	65	12.2 start long stop	long stop
Yizheng Chemical Fiber 1#	35	11.4 Start shutdown for maintenance	12.7 has restarted full load

( Note: The total production capacity is based on 69.8 million tons/year, excluding 5.85 million tons/year of old and rebuilt production capacity that has been parked for a long time)

                                                  Table 3 PTA short-term device changes

During the period (20221202-1208) of this cycle , the PTA plant has not changed much, with an average weekly start-up of 66.27%, and a weekly output of 963,700 tons, a decrease of 63,800 tons from the previous cycle . Within a week, Yizheng Chemical Fiber 1 # plant restarted, and Yisheng New Material 1#2# The load reduction of the plant, the long-term shutdown of Yangzi Petrochemical 2 #, the new PTA plant of Weilian Petrochemical has not yet been mass-produced, the commissioning of Tongkun Jiatong has been delayed, and the overall supply is low, which has certain support for the market, but the downstream polyester load has also declined, basically There is no benefit for now. In the follow-up, we need to pay attention to the impact of the subsequent new device commissioning and maintenance on the market.

3.3PTA Futures Market Quotes

     During the (20221202-1208) period, the PTA futures 2301 market fluctuated and fell during this period, and the average futures price fell by 89 yuan/ton compared with the previous cycle, a decrease of -1.73%. As of December 8th, the mainstream supply of goods in the main port, this week and next week, the delivery offer is around 140-150 liters, and the bid intention is around 100 liters; the next delivery offer in December is around 120 liters, and the bid is 01 liters 70 nearby. Crude oil fell sharply, PX was slightly lowered, PTA processing fees remained low, and the operating rate was 66.56%.

Yizheng Chemical Fiber restarted at 350,000 tons, Yangzi Petrochemical stopped at 650,000 tons; Weilian Petrochemical and Jiatong Petrochemical started production later than expected.

The operating rate of polyester is around 73%. During the period (20221202-1208), the overall production and sales are acceptable, the inventory pressure has eased, and the profit line of some products has returned. PTA Futures Spot Basis

After the decline, it remained stable. On the whole, PTA cost support is weak, the current operating rate is low, and there is no expectation of a large inventory accumulation. The downstream demand is stable to above, and the overall decline is limited. , it is necessary to pay attention to the impact of the actions of major suppliers on the spot market.

3.4Downstream polyester market summary

Figure 4 Profit and loss chart of polyester production in 2021-2022

Figure 5 Production and Sales of Polyester Filament in 2021-2022

date	polyester start	Polyester 1.4D	POY (150D/48F)	FDY (150D/96F)	DTY (150D/48F)
December 01 _ _	74.84%	6900	6725	7475	7850
December 08 _ _	72.83%	6775	6950	7625	7950
ups and downs	-2.01%	-1.81%	+3.35%	+2.01%	+1.27%

Table 5 Weekly price comparison table of polyester products