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Completely different from the current market's pessimistic expectations of the large refining projects themselves and the end demand, we believe that the domestic private large refining sector's historic structural profit leap is coming, with a huge expectation gap!
Huge difference in expectations for the core source of incremental profits: we believe that the profits of large refineries will be reflected mainly through the PX-PTA-polyester segment of the main business of the relevant leading enterprises, and the structural expansion of the profits of the main business of the PTA-PX segment as the main form of reflection of 2019-2020.
Huge difference in expectations for demand: our judgment of demand with the market there is a huge difference in expectations, our empirical derivation based on objective data shows that: in the GDP growth rate of 6-6.5% of the environment, 2019 polyester filament downstream demand growth rate will not be lower than the lowest level in the past five years of 6.7%, and from the data since 2002, the downstream demand growth is more unlikely to appear the market expected. growth rate is more unlikely to see the negative growth expected by the market.
For the PX pricing power premium (outside of supply and demand pricing) profit transfer completely lack of expectations: the large-scale production of China's private large refining PX units will make PX from the current Japanese and South Korean highly monopolistic pricing back to the strong competitive attributes of bulk raw material commodities, its price will inevitably be structural decline in the PX segment of the long-existing pricing power premium will no longer exist, we judge that In 2019-2020, the price reduction of PX will be about $200-400 per ton (including the loss of pricing power premium and price reduction due to oversupply); at the same time, PX downstream of PTA and polyester due to recent years, leading enterprises in the past strong competitive environment to stand out to achieve the enhancement of the bargaining power, which will make the large refining products end of the PTA and polyester segment of the total profit of the structure of the leap, especially the PTA leading enterprises in the past strong competitive environment. Leap, especially PTA leading enterprises will have more full autonomy based on the principle of profit maximization PTA production arrangements.
1.1 Private large refining plate earnings probability will exceed market expectations and strong certainty
1.1.1 The core profitability of private large refining source and the three barrels of oil is very different
The core of the profitability of private large refining plate comes from the crude oil - PX - PTA - polyester industry chain. PTA-polyester industry chain, its profits are mainly reflected in the naphtha-PX, PX-PTA, PTA-PET three links.
The private large refining will take the structural expansion of profits in the PTA-PX link of the main business as the main form starting in the second half of 2019 and continuing into 2020, which will ultimately lead to the PTA-PX-polyester link from the traditional "strong cycle weak profit" to the "Weak cycle strong profit" for structural transformation, and the probability that the results of this transformation is irreversible , this profit model is very different from the three barrels of oil refining. The market habitually uses the three barrels of oil large refining project to analogize the private large refining project used to assess the future profitability of similar refining scale, there is a fundamental logical flaw, the formation of a huge difference in expectations!
The profitability of private large refineries has great expectation gap, which is mainly manifested in the following three aspects:
1. For the large-scale localization of the PX plant brought revolution of commodity pricing power is seriously lacking in expectations.
2. Failure to take into account PX's bargaining power changes brought about by the transfer of huge profits, the loss of pricing power premium superimposed on the transfer of profits brought about by overcapacity and the traditional overcapacity caused by the transfer of profits there is a huge difference. In addition, private polyester large refining integrated unit for the average cost formula for PX plant most of the use of Japan and South Korea imported PX as the cost. And after the private big refining PX is put into production, most of the intermediate costs (tariffs, freight, ACP premium, etc.) will be transferred to profits.
3. Currently, the two private large refineries are the largest refining units in China. Large refineries PX unit there is a significant scale effect , its size far exceeds the current size of the device in Japan and South Korea, in accordance with the previous ratio of device costs and expenses will produce a significant overestimation, and for the magnitude of its downstream profit margins have been underestimated.
4. The market is too worried about the growth of PTA capacity, the market blindly all the proposed construction capacity of all the statistics for the rigid production capacity, and the actual rigid production capacity will be less than the market expected.
5. The market is too pessimistic about demand, generally expected that the demand for textile and apparel will be negative growth, did not realize that the end of the textile and apparel demand is highly positively correlated with the GDP, and the past 19 years of data show that its correlation coefficient is as high as 0.82, as long as the GDP can achieve more than 5% growth, the textile and apparel industry chain demand will maintain a strong certainty of more than 5% growth.
1.1.2 A fundamental shift in the profitability structure of large refineries
The current market view is that the decline in oil prices, aromatics and its downstream product prices have fallen, resulting in a weakening of profitability. In contrast to the market view, we believe that the market has confused the basic concepts, crude oil and its industrial chain of products prices with oil prices are highly correlated with the notion that (this is qualitative: the product and raw material prices in the majority of the time in the same direction of change), but the downstream of crude oil in the process of oil price changes in the product of the specific magnitude of the increase or decrease in the process of trading by the product itself in the process of buying and selling of the actual order to determine (this is quantitative: the product and raw material in a particular direction of change). and feedstocks move in a particular direction by their own bid and ask orders). The raw material side can fall at the same time as the product, but when the price fall on the raw material side is greater than the price fall on the product side, it will lead to a widening of margins on the product side rather than a narrowing of margins. We judge that in 2019-2020 the new PX project capacity is estimated to be up to 12.5 million tons/year (three major private large refining projects Hengli Dalian, Zhejiang Petrochemicals and Hengyi Petrochemicals *** counting 10 million tons, in addition to Zhongjin Petrochemicals and Zhonghua Quanzhou more than 2.5 million tons), the new supply accounted for more than 50% of the 2018 domestic PX demand. The new PX capacity brought by the new big refining will inevitably impact the existing PX supply pattern, which will inevitably bring a round of structural decline in the PX market. The abundant profits from the naphtha-PX link will be prioritized and distributed to the downstream PTA units.
This structural decline in PX prices can be partially informed by the localization process of PTA units. In the 2011-2012 period, PTA domestic new capacity (12.6 million tons / year) more than 50% of the current demand, the gross profit of the PTA unit narrowed substantially, we expect the second half of 2019 to start to 2020 throughout the year, the PX link to the downstream PTA transfer of structural profits of the magnitude of more than 250 U.S. dollars / ton, of which the probability of the PTA link will be transferred to the middle of the Most of the profits.
A deeper look at the 2019 naphtha-PX link profits why priority allocation to the PTA-PX link rather than polyester-PTA link, stems from the following two core arguments:
1. The current industrial structural adjustment in 2019-2020, the PTA link is the most important one. 2020 put into production units, PX capacity increase is huge, while PTA capacity increase is weak. Most of it is the orderly release of PTA capacity from the big refiners themselves with the main purpose of profit maximization.
2. Domestic PTA capacity concentration is high, private large refining leading enterprises for PTA bargaining power is stronger than polyester, PX - naphtha profits to PTA - PX concession, private large refining leading enterprises benefit the most.
Big refining plate related leading enterprises to maximize profitability of the strong, especially to take against the trend of large increases, we believe that the big refining leading enterprises to take the orderly release of production capacity to meet the domestic and foreign new demand for the main tone of the future, rather than disorderly release.
In addition, the polyester segment producers are more dispersed than PTA, the current PTA's top 10 companies concentration of 81.6%, the top 4 leading companies concentration reached 55%, while the current polyester's top 10 companies concentration of about 41%, the PTA segment of the leading companies bargaining power is significantly stronger than the polyester segment.
1.2. Demand detailed data empirical deduction: polyester terminal textile and apparel demand stable positive growth without suspense
We believe that the future of polyester filament downstream demand growth rate will not be lower than the lowest level of the past five years 6.7%, and from the 2002 data since the situation, the growth rate of downstream demand is more unlikely to Negative growth, eliminating subjective preferences based on objective data itself, the empirical derivation process is as follows:
As the "crude oil - PX - PTA - polyester - filament" industry chain downstream, textile and apparel belongs to the consumer industry, "clothing, food, housing and transportation" in the clothing, for the consumer industry, "clothing, food, housing and transportation". "in the clothing, one of the necessary consumer goods for residents. According to the National Bureau of Statistics announced the textile and apparel retail sales and GDP (current price) year-on-year growth rate, we found that the growth rate of the textile and apparel industry is highly positively correlated with the GDP growth rate, from 2002 to 2018, the correlation coefficient between the two reaches 0.82. At the same time, we found that, although in recent years, with the decline in China's GDP growth rate has entered a new normal stage, but in the case of GDP growth rate of more than 5%. case, the growth rate of the textile and garment industry has been maintaining positive growth. Over the past five years (2014-2018), the year-on-year growth rate of the textile and apparel industry in terms of retail sales reached an average of 8.8%, with a low of 6.7% in the first half of 2016.
And from our tracking of polyester filament starts and filament inventories, after the end of Chinese New Year 2019, polyester filament starts in the latest week (March 1, 2019) quickly rebounded to 77.5%. Considering that the annual vacation of polyester filament mills during the Spring Festival leads to a significant drop in the polyester filament start rate during the Spring Festival vacation, we calculate that over the past 5 years, the Spring Festival vacation started 36.4 days after New Year's Day on average, while the 2019 Spring Festival vacation started 34 days after New Year's Day, so the 2019 start rate is highly comparable with the average of the same period of the past 5 years from an empirical perspective.The 2019 polyester filament start rate after the spring break is significantly higher than the average of the past 5 years of 67%.
And from the point of view of inventory days of POY, DTY and FDY, as of the latest week of 2019 (March 1, 2019), the average inventory days of POY is 7.4 days, and the average of the past 5 years is 13.4 days; the average inventory days of FDY in 2019 is 11.2 days, and the average of the past 5 years is 17.1 days; the average inventory days of DTY in 2019 is 11.7 days and 23.5 days on average over the past 5 years.Since 2019, the inventories of all three types of polyester filament yarns have been significantly lower than the average level over the past 5 years.
By comparing the start rate and inventory days, we find that since 2019, the start rate of polyester filament yarn is significantly higher than the average level of the past 5 years, while the inventory level is substantially lower than the average of the past 5 years. Therefore, we believe that the growth rate of downstream demand, i.e., the textile and apparel industry, is better than the worst case scenario of the past 5 years in 2019, and is highly comparable from an empirical perspective against the average of the past 5 years.
According to the 2019 government work report made by the Premier at the second session of the 13th National People's Congress, in 2019, China's economic development is targeted at GDP growth of 6-6.5%. In our opinion, as the growth rate of the textile and garment industry is highly correlated with the GDP growth rate, the correlation coefficient reaches 0.82. The average year-on-year growth rate of textile and garment in the past 5 years reached 8.8%, with a minimum of 6.7%, while the start rate of polyester filament yarn has been higher than the average level of the past 5 years, and the inventory level of POY, FDY and DTY has been lower than the average level of the past 5 years, and the objective data shows that compared with the The average level of the past 5 years, the growth rate of the demand side in 2019 is significantly better than the lowest level of the past 5 years of 6.7%, and the probability is flat or even more than the average level of the past 5 years of 8.8%. Under the premise of stable GDP growth, we believe that the future growth rate of downstream demand for polyester filament will be no less than the lowest level of 6.7% in the past 5 years, and from the data available since 2002, the growth rate of downstream demand is more unlikely to be negative.
2.1PX gradually shifted from high-margin Japanese and Korean monopoly pricing to low-margin fully competitive pricing
There is a mismatch of production capacity in the domestic PX-PTA-polyester segment. Domestic PTA and polyester production capacity is in excess, however, the domestic public's misunderstanding of PX and the social opinion of the boycott, so that more than 50% of PX products still need to be imported from the neighboring region of Japan, Korea, Taiwan and other regions, the formation of Japan and South Korea dominated by the seller's market of PX. Because of the lack of domestic supply of PX, mainly from Sinopec, so that the pricing of PX with Japan and South Korea's highly monopolistic characteristics, the current PX pricing by the Japanese and South Korean PX seller enterprises to the Asian contract price (ACP) way to hold, and the spot is also more concentrated in the hands of a small number of highly price-controlled enterprises, the current pricing of the PX settlement model is 50% of the ACP pricing +50% of the spot price.
As a major consumer of PX, the private large refining PX capacity was built to get rid of the passive acceptance of the situation of Japan and South Korea companies pricing. In the case of PX self-sufficiency, the private refining segment will gradually get the bargaining initiative when signing long-term contracts with Japan and South Korea, and gradually change from 50% Asian Contract Price (ACP) + 50% average market price +/-(2~4) USD/tonne PX contract pricing for Japan and South Korea to 100% average market price (self-sufficiency), which will make the domestic market return to strong market attributes of commodities from Japan and South Korea's high monopoly pricing. The strong market attributes of commodities, the loss of this Japan and South Korea's pricing power brought about by the transfer of profits will be the probability of far more than the market expected.
After the private large refineries put into operation, the following parts will be changed from cost to profit:
1. Pricing right premium and supply and demand tension premium, we judge that the current Japanese and South Korean monopoly pricing PX pricing right premium and supply and demand tension premium combined is about 300-450 U.S. dollars / ton.
2. Japan and South Korea to import PX raw materials need about $ 20 freight insurance , in addition to 2% of the tariff , if the private big refining PX self-sufficiency, this part of the cost will be transformed into a corporate profit.
3. PX plant scale effect of cost reduction. At present, Japan's average single set of PX size of 420,000 tons / year, more than 90% of the units put into operation before 2010; South Korea's average single set of PX size of 600,000 tons / year, and the domestic state-owned enterprises PX device size is similar, relative to Japan's PX device is newer. The new private refining with 4 million tons / year PX device, there are significant cost reductions in fees and raw material consumption.
2.2 PTA from the capacity of rigid disorderly placement to grab the market to the leading enterprises in an orderly manner
2.2.1 Domestic effective PTA production capacity device situation
Domestic existing leading PTA device is mainly owned by the private refining companies owned by the private refining companies, the domestic As a leading enterprise in the PTA industry, private large refineries occupy more than 50% of the market share, while the average unit size of 2.1 million tons/year, with obvious scale advantages.
The existing domestic backward PTA capacity is concentrated in the hands of other enterprises, the average size of 420,000 tons / year, in the market has been clearly behind.
2019 new put for supporting their own downstream polyester PTA capacity only new Fengming Dushan Petrochemical 2.2 million tons / year PTA device, is expected to reach production in the first half of 2020, in accordance with the polyester downstream annual consumption growth rate of not less than 5% considerations, the set of PTA 2019 rigid new production capacity to be able to fully digested in the consumer side.2020 other PTA production is mainly concentrated in the hands of large refining leading enterprises, large refining leading enterprises with a high degree of awareness of the market and a strong demand for profitability (the relevant leading enterprises continue to large increase), we judge that large refining leading enterprises PTA production arrangements will be given full consideration to the principle of profit maximization.
2.2.2 Domestic PTA from the rigid put capacity to squeeze market share to the orderly release of production capacity to achieve profit maximization change
PTA has experienced a 10-year golden expansion period since 2000, in 2011 the apparent consumption and production capacity overlap, means that in 2011 the domestic production capacity has been able to Self-sufficiency. In order to seize the market share, in 2011-2014, PTA plant continued to expand. However, it can be seen that the nominal capacity rose quickly, but the production lift is relatively slow. 2014, one of the leading domestic PTA enterprises of the Far East Petrochemical bankruptcy reorganization, and another leading enterprise Tenglong Aromatic PX plant had a major accident, the PTA plant for a long time to stop. The prelude to the capacity clearance of PTA units was drawn. After three years, the PTA device has always hovered near the break-even point, a large number of zombie production capacity, some enterprises and even the device has just been completed, but taking into account the cost factor, never able to put into production.
After 2017, PTA gradually due to the improvement of supply and demand, leading enterprises can gradually profit and leading enterprises are closer in size, and far more than other non-leading enterprises, making the competitive situation of domestic PTA clear. Leading enterprises from the disorderly expansion of production capacity to seize market share to the profit maximization of the orderly release of production capacity to change. Mainly embodied in the PTA independent pricing ability to enhance, especially resistance to the decline in oil prices to enhance the ability, but subject to the PX monopoly of Japan and South Korea, so that the PTA price increases lack of practical significance, because price increases in profits basically by Japan and South Korea through the PX price increases to eat, but once you can get rid of the Japanese and South Korean PX monopoly, then the PTA link to the independent pricing ability to be able to fully reflected in the growth of profits.
2.3PTA-PX is the raw material end of the PX capacity overload of the largest beneficiary link
earnings structural changes based on capacity structure changes , 2019-2020 domestic production of 12.5 million tons / year of new PX capacity to break the current import and export situation. The main affected countries are the main sources of domestic PX imports, South Korea and Japan.
Domestic private refining capacity compared to Japan and South Korea production capacity there is a clear scale advantage and transportation cost advantage, so the PX smashing force mainly from Japan and South Korea PX capacity. In addition to Lotte Chemical, SK, Hanwha Total, Hyundai Cosmo, GSCaltex, S-oil do not have PTA downstream polyester production capacity. Japan's largest PX exporters, JXTG and Idemitsu Kogyo, are also at risk of closure due to increased competition as their average size is also much smaller than domestic capacity.
The addition of PX capacity has created an imbalance between PX supply and demand in Northeast Asia. there will be a structural decline in PX prices. So that the private big refining enterprises have plenty of autonomy to decide the PTA production arrangements to maximize profits, this independent pricing power is the past Chinese leading companies in Japan and South Korea in front of the company never had.
3.1 PX Background
3.1.1 PX Existing Units
Although paraxylene (PX) production capacity has been climbing gradually, however, the self-sufficiency rate of paraxylene (PX) has not been significantly increased. Over the past five years, the single-month capacity has risen from 650,000 tons per month to around 850,000 tons per month, while the self-sufficiency rate has remained at around 43%.The nominal domestic production capacity of paraxylene in 2018 was at 14.8 million tons per annum (mtpa), but the actual production was at 11 mtpa. Domestic PX, although less than half of the self-sufficiency rate, however, the start-up rate is still not high, stemming from the shorter industrial chain of some units with higher costs.
The production path of PX is mainly divided into the following parts:
1. Atmospheric Pressure Reducing Unit (APRU), which separates crude oil into LPG, naphtha, gas oil, gasoline, gasoline diesel, atmospheric gas oil (AGO, VGO) and atmospheric residue (AR, VR) according to the boiling point of the distillate.
2. Reformer Unit (RRU), which converts the heavy naphtha from the APRU and the hydrocracked gasoline from ethylene unit into gasoline, which is hydrolyzed. Reformer, which reforms heavy naphtha from the NRU and cracked gasoline from the ethylene unit after hydrogenation to aromatize some of the isomeric alkanes and improve the aromatics yield. Reforming is the main source of hydrogen for refineries. The reforming route is divided into two categories: 1. Fuel route, through the reforming to get high-octane reformed gasoline 2. Aromatics route through the reforming to get the feedstock for the aromatics combined unit
3. PX unit PX unit contains a number of sets of units, including cyclopentane sulfone extraction, alkyl transfer unit, isomerization, disproportionation unit, adsorption, separation and extraction unit. disproportionation unit, adsorption, separation and purification unit, etc. The output of PX, benzene, heavy aromatics (C10+).
3.1.2PX Technology Overview and Technology Shortcomings
PX is produced from mixed aromatics obtained by atmospheric decompression distillation - pre-hydrogenation - reforming of petroleum, and cracked gasoline hydrotreating in ethylene plants through a combined aromatics plant, which consists of the following technologies:
1. Aromatic extraction - the principle is similar to the dissolution, usually cyclopentane sulfone extraction, but also N-methylmorpholine (NFM) or N-methylpyrrolidone (NMP), this technology for UOP / AXENS / GTC / Mobil / Sinopec Shiyi Academy of Science and Technology of a number of patent vendors master.
2. Disproportionation and Alkyl Transfer Methods - UOPTatoray/IFPAxensTransPlus/GTC
3. Adsorption and Separation: Typical adsorption and separation processes are UOPParex/IFPAxensEluxe. IFPAxensEluxyl (no domestic technology).
4. Ethylbenzene / xylene isomerization : UOPIsomar / AxensOparis / Mobil / Sinopec Shiyi Academy of Sciences technology, etc.
5. Toluene methanol alkylation method GTC technology (not used much at present)
For the large-scale
UOP's combined aromatics unit consists of its CCRplatforming, Sulfolane (cyclobutanesulfone extraction), Tatoray (disproportionation), Parex (adsorptive separation), and Isomar (isomerization);
Axens' combined aromatics unit consists of its Aromizing (reforming), Morphylane (separation), and Morpholane (isomerization). The Axens aromatics complex consists of its Aromizing (reforming), Morphylane (extraction), Transplus (disproportionation), Oparis (isomerization) and Eluxyl (adsorption separation) processes.
Continuous Countercurrent Reforming (CCR) technology was developed by Sinopec in October 2013 at a new reforming plant in Jinan, and was subsequently used in the 2013 expansion of the aromatics plant at Hainan Refining. This technology, as an important part of the localized aromatics technology, won the National Science and Technology Progress Grand Prize in 2015. This technology breaks the monopoly of overseas continuous reforming technology and provides a technical option for subsequent large-scale continuous reforming units. Of course, the status of overseas core technologies such as UOPCCRplatforming is still unshakeable, but it is important to see that breaking the monopoly is a key step in reducing the patent license fee of overseas companies and the disclosure of overseas technologies to domestic information.
The current domestic technological shortcomings lies in the adsorption and separation of the moving bed has not yet been successfully utilized cases, most of the existing domestic installations using Honeywell UOP's Parex process, because of its use of unique rotary valves, maintenance cycle is longer, and the operation is more stable. A small number of French oil company Axens Eluxyl process, this process because of the use of 140 program-controlled valves (on and off valves), due to the frequent operation of the program-controlled valves there is a certain probability of failure, and thus the maintenance cycle is relatively short. Although domestic production of adsorbents for adsorption separation is possible, there are bottlenecks in the field of equipment manufacturing.
3.1.3PX pricing methods now
PX price indicators at this stage are mainly divided into three categories:
1, international closing prices (divided into CFR China, FOB Korea, FOB U.S. Gulf)
2, domestic Sinopec (SPCP) settlement/listing price and domestic PX spot price
3, AsiaContractPrice (AsiaContractPrice) negotiated price
Among them, the most commonly used price indicator in Asia is the ACP price, which is known as "6 + 7" pricing model in the industry, that is, the price of the new Nippon Oil (Japan JX), Japan's Izumi Nissan , ExxonMobil, South Korea's S-oil, South Korea's SK, and India's Trust (joined in April 2017), which are the six PX suppliers, give the advocate price, and Mitsui Chemicals, Mitsubishi Chemicals, BP, China-America Associates (CAPCO), Oriental Petrochemicals (OPC), Yisheng, and Shenghong, which are seven PTA producers, give the counter-offer price, and the last working day of each month is the final deadline of the negotiation time, as long as The last working day of each month is the final deadline for negotiation, and as long as more than two PX suppliers (including two) and more than two PTA producers (including two) reach an agreement, this price will be used as the ACP price of PX for the next month.
Because of the previous oversupply of domestic PX in China, there is no domestic PX spot market, and trade is scarce, PX producers usually supply directly to downstream PTA plant companies in the form of contract cargoes, and the contract formula for most of the PX plants in China is generally 50% daily average price + 50% ACP pricing.
3.1.4 Asian PX overhaul
Asian PX plant in March-April 2019 ushered in a larger-scale overhaul, shutdown and overhaul capacity of about 4 million tons/year, taking into account that the overhaul cycle is usually in 1 month to 2 months, the PX market in March-April 2019 will most likely remain in a supply Tight situation.
3.1.5 Mixed xylene (MX) has substitutability with gasoline
Domestic reformulated gasoline exists with higher octane number and RON around 100~105, which is a high-quality gasoline blending fuel. When the price of mixed xylene is lower than the price of gasoline, there exists price support because mixed aromatics (with requirements for benzene content) can be blended into gasoline at no extra cost. There are also a number of gasoline reformers in China, whose purpose is to increase the quality of the blendstock. From the process technology point of view, there is not much difference between the reforming reaction with aromatics and gasoline as the target product, and it is only necessary to adjust the catalyst and the operating temperature conditions to obtain high-quality reformed gasoline. In the future, the trend of domestic gasoline standard is to reduce the content of unsaturated hydrocarbons in gasoline, mainly aromatic hydrocarbons and olefins, so as to reduce the incomplete combustion of unsaturated hydrocarbons in gasoline for the pollution of the environment,
Usually, the RON of mixed xylenes is in the range of 100-105, and the domestic mixed xylenes are divided into two categories, the first one is the solvent grade, and the second one is the isomerized grade, which contains a lot of ethylbenzene in the solvent grade and more trimethylbenzene in the isomerized grade. The solvent grade contains a lot of ethylbenzene, while the isomerized grade has more trimethylbenzene in it, which is more conducive to disproportionation and alkyltransfer devices.
The current national mandatory standard for gasoline, GB19147-2016, has the following requirements for aromatics and olefins, with the National Six A standard coming into effect on January 1, 2019, and the National Six B standard coming into effect on January 1, 2023.
The National Six B standard is a new standard for gasoline, and it is a new standard for gasoline.
3.2 Background of PTA
3.2.1 Existing PTA installations
Domestic PTA production capacity was basically self-sufficient around 2011, and then the rapid expansion of production capacity led to overcapacity. In 2014-2015, a large number of production capacity shut down and become zombie capacity, the start rate all the way down to about 5 percent. However, in the past three years, the start-up rate gradually increased, the current start-up rate of 80%. PTA device upstream subject to PX capacity and imports, downstream by polyester device polyester device start-up impact, supply and demand is more complex. Many of the existing potential domestic production capacity has been shut down for many years, the resumption of production takes a long time for planning, capital injection, equipment maintenance and staff training. For 5 years has been unable to start most of the capacity has become a zombie capacity. According to CCFEI and Wind data, during the five-year period from 2013 to the present, the start-up rate has never exceeded 90%. According to CCFEI statistics, the nominal capacity of PTA from 2019 is 51.32 million tons, and the effective capacity is adjusted to 45.17 million tons, with the effective capacity accounting for 88% of the nominal capacity.
3.2.2PTA mainstream technology summary
Domestic PTA plants mainly use two types of process routes, medium-temperature oxidation and low-temperature oxidation, and the original high-temperature oxidation has been gradually withdrawn and converted to medium-temperature oxidation.
The representative process of medium temperature oxidation method is BP-Amoco process, INVISTA process, Mitsui oil chemical process. Over the years, the volatilization of PX and acetate solvents has been significantly reduced by lowering the reaction temperature, resulting in refined PTA.
Low-temperature oxidation is represented by the Eastman and Lurgi processes, which do not have a refining unit, resulting in medium-purity PTA (EPTA).
The most licensed technology globally is BPAmoco's MTO process, followed by INVISTA's MTO process.
Most of the new domestic production capacity is now using BP or INVISTAP8 two mature processes, according to the Hengli PTA-4/5P8 process and Tongkun Jiaxing Petrochemical Phase 1 P7 process analysis, the consumption of each ton of PTA from 0.656 tons to 0.65 tons, acetic acid consumption from 35kg to 29kg, the new process from the raw material as well as the energy consumption of the advantages of the obvious
PTA plant maintenance and inventory
PTA plant in late March ushered in a small peak of maintenance, Yisheng Ningbo 4 # Hengli 3 # Tongkun 2 # as well as a plant in South China 3 # are two weeks of maintenance.
PTA circulation chain inventory quantity seasonal rise, but the inventory quantity is still in the history of lower position. Usually after the Spring Festival polyester enterprises back to work PTA will appear to go to the inventory situation, so the current PTA inventory pressure is not big.
3.3 Polyester Industry
The main downstream types of PTA are PET (polyethylene terephthalate), PTT (propylene terephthalate), PBT (polybutylene terephthalate), and DOTP (dioctyl terephthalate). More than 95% of the share, and thus the study of PET can reflect the polyester industry demand for PTA.
Domestic PET's main downstream for polyester filament, polyester staple fiber, and polyester bottle chips.
Polyester filament is mainly divided into POY, FDY, DTY, according to the use of civil filament and industrial filament.
Polyester staple fiber downstream is mainly pure polyester yarn, polyester-cotton yarn and polyester viscose yarn, the downstream of the bottle is mainly beverage alcohol products bottle packaging.
The concentration of leaders in specific segments is not consistent
1. Civil filament field Tongkun Group, Xinfengming, Sheng Hong Group, Hengyi Petrochemical occupies a leading position, the top four accounted for about 38% of production. Production capacity of the largest Tongkun Group polyester filament production capacity of 5.5 million tons / year, the main downstream of civil filament is the textile and apparel industry.
2. Industrial filament leading enterprises in the field of ancient fiber road, UF shares, Haili, Hengli Group. The production of the first four accounted for about 64% of the total market. And with the expansion of Hengli Kanghui Petrochemical, the CR4 will rise further in 2019-2020.
3. Polyester bottle chips downstream is the beverage alcohol beverage packaging industry. China Resources, Wankai, Hengyi and Sanfangxiang are the top four manufacturers in terms of production capacity in the bottle flake field. The capacity of the top four occupy more than 50% of the market capacity.
4. Polyester film downstream is mainly the electronics industry, Eurasian film, Double Star New Material, Hengli shares occupy the leading position in the country, of which Eurasian film in 2015 bankruptcy reorganization. Overseas manufacturers, such as DuPont, occupy a leading position in the high-end field, importing more than 300,000 tons per year.
5. PBT field, Changchun Chemical, Hengli Group has the largest domestic production capacity. Downstream to the electronics and electrical appliances class is mainly, both automotive machinery, electric light source industry.