PTA will further reduce the operating rate in December
affected by the high price of raw material p-xylene (PX) and the sluggish demand in the downstream market, PTA and polyester shrinkage, known as forming shrinkage, have faced severe cost pressure since the fourth quarter of this year. PTA manufacturers, including Yisheng petrochemical, Shaoxing Far East and Xianglu petrochemical, have said that they have reduced the operating rate of their units from the previous 100% to about 80% in November. If profits continue to be eroded, the operating rate will be further reduced in December
pta producers said that the current business environment is very severe. On the one hand, the PX price remains high, on the other hand, due to the impact of the production reduction of downstream polyester producers who permanently reuse the primary input data, PTA demand is weak, and these two factors lead to the squeeze on PTA production profits. Xianglu petrochemical company said, "reducing the operating rate of the unit is the only way for us to reduce losses." The company has a time division capacity of 1.5 million tons/year PTA production plant in Xiamen, Fujian. Platts data shows that the PX contract price in Asia in November was $1500, which means that the average spot price of PTA needs to reach $1140 to reach the win-loss balance point. In fact, the average price of PTA from November 1 to 23 was only $1078.38 (CFR, China)
since October, PTA downstream polyester producers have begun to reduce production. They agree with PTA manufacturers to reduce production, because this may be a way to force PX prices down. PX is the only bulk commodity in the polyester industrial chain, and the current profit is considerable. Platts' data showed that from November 1 to 23, the average price difference between PX and naphtha reached $546.91 (ton price, the same below), while the win-loss balance point was $230
Jiangsu Shenghong company, a polyester manufacturer, said: "PX prices should be adjusted downward to an acceptable level in the polyester industry chain. At present, PTA manufacturers' reduction of production will lower PX prices." Some people in the market turned the emergency stop button on the electrical control box and manual control box. The source said that the main factor for polyester manufacturers to reduce the operating rate of devices was the sluggish export demand for Europe and the United States
a manager of Zhejiang Hengyi group, one of China's largest polyester yarn manufacturers, said: "the current polyester inventory level is about 20 days, and the demand from foreign buyers is low, but the domestic demand is still strong. PTA and polyester manufacturers need to reduce the unit operating rate to balance the market. Only when the market is in balance between supply and demand, can confidence be restored and prices be stable."
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