“One high and two low” of China’s PX inventory in 2016

Introduction: In 2016, PX social inventory level remained at more than 1.6 million tons, and the overall operation was relatively stable. The reason for this phenomenon is simply “one high and two low” – high imports, low production, and low demand. Due to the low operating rate of domestic PX devices, the domestic effective output level is also low; while domestic PX import dependence is as high as 57%, and the monthly import volume is basically maintained at the level of 1 million tons; due to the concentration of maintenance and accidents at major PTA factories during the year, In particular, the rigid requirements of the G20 Summit and the delay in restarting the Xianglu petrochemical plant have caused a decline in domestic PX demand levels. This has resulted in high levels of PX inventory levels in China.

The overall trend of PX inventory in 2016 was relatively stable. Among them, the import volume of PX in January and February was relatively low, mainly due to the low operating capacity of polyester factories during the traditional Spring Festival period, which in turn dragged down the high inventory of PTA factories, and the load was low due to profit margins. At the same time, domestic PX supply The level fell due to the unstable operation of the new capacity CICC plant, and the domestic social inventory remained at a low level of 1.8 million tons; after entering March, with the increase in the load of the domestic PX plant, and the Japanese and Korean supply attempts to occupy the domestic market share. The level of exports to China has increased, so that PX imports have exceeded one million tons for several consecutive months. However, the overall operation of domestic PTA factories has fluctuated around the 70% level, and the demand for PX has been relatively stable. Therefore, PX stocks have shown a slow increase trend, and in In April, the inventory peak for the year reached 2.1295 million tons; however, from June to September, due to the influence of the G20 Summit, domestic PX, PTA and polyester factories were involved in large-scale parking plans, and most of them were polyester factories adopting an advance production and stocking strategy. This in turn drives up the operation level of domestic PTA devices. In comparison, the operation of domestic PX devices is much smoother. Therefore, the domestic PX supply and demand pattern tends to be tight. However, due to the obvious accumulation of inventory in the early stage, the overall domestic social inventory showed a slight decline and then consolidated. situation.

The end of the year is approaching, and looking forward to 2017, although only one 1.1 million tons/year PTA unit in Sichuan Shengda is expected to be put into operation, the total domestic PTA unit production capacity is expected to reach 50.19 million tons by then, while Xianglu Petrochemical’s 4.5 million tons /year PTA device has made some progress due to equity valuation acquisition and other matters, and is expected to restart in early 2017. Therefore, if calculated based on the average annual operating level of 70%, domestic PX demand will still be as high as 23.1378 million tons / year . However, the growth rate of domestic PX supply is not as fast as the demand growth rate. Therefore, on the whole, it is expected that domestic PX will show a certain destocking performance in 2017.