First, the core viewpoint
From the perspective of the production cycle, the increase in production is PTA (to add insult to injury, the industry's profits will still be on the edge of the profit and loss of mainstream devices);
The least put into production is PX (adding fuel to the fire, which will try to swallow downstream profits, resulting in a great contradiction between upstream and downstream profits);
Polyester production capacity has returned to normal (as usual, mainly depending on the terminal digestion capacity);
The pressure on ethylene glycol production is expected to slow down significantly (the supply and demand margin is gradually expected to improve).
From the perspective of variety hedging, PX is a multi-allocation, multi-PX short PTA, multi-PX short **, PX positive set (depending on the contradiction between upstream and downstream processing fees);
PTA air distribution (look at the processing fee, high air configuration);
Ethylene glycol does absolute ** improvement (it also depends on the cost), in the early stage of high inventory depletion, the trend of intertemporal spread may not be as unilateral.
You can use the price difference between varieties to make a reference for pricing or valuation: PTA processing fee of more than 500 yuan tons is considered high (the whole industry is almost profitable), 300-500 yuan tons should be reasonable, 200-300 yuan tons are slightly underestimated (all losses in the whole industry), and 200 yuan tons are difficult to sustain for a long time. For PX pricing reference plus, you can pay attention to the processing fee of PTA, and when it is less than 300 yuan ton, you need to be wary of the negative feedback brought by downstream PTA. Down, you can pay attention to the spread of PX-**, if it is less than $350 ton, PX is undervalued. For next year's staple fiber, the production capacity will increase steadily, the demand is difficult to exceed this year, the overall supply and demand are stable, you can refer to the profits of the past two years for the staple fiber pricing, about 300-500 yuan tons.
2. Analysis of the production cycle
(a).pxAt the end of the year's production peak, the new production capacity was sporadic later
Judging from the current situation, after the high-speed production of PX in the past five years, the subsequent production pressure will slow down significantly, and the production will be relatively sporadic. In 2024, only 3 million tons of Yulong Petrochemical's production capacity is expected to be put into operation.
(b).pta: There are still a lot of new production capacity, and backward production capacity is facing elimination
Looking forward to 2024, the growth rate of PTA production capacity will remain high. Judging from the current statistics, about 9.5 million tons of new production capacity is planned to be put into operation in 2024, and concentrated in the first half of the year.
Therefore, the pressure on PTA** is still very high, and the industry will still be at the bottom of the industry cycle.
(3) Polyester: production capacity growth returns to normal
For 2024, polyester is expected to be put into production of about 6.66 million tons, and the production capacity growth rate is about 83%, the overall production capacity growth rate is neutral and high, but it should be noted that the production is concentrated in polyester bottle flakes, with a filament of about 1.16 million tons and a filament production capacity growth rate of about 27%；About 600,000 tons of staple fiber were put into production, and the production capacity growth rate was about 62%；About 3.8 million tons of bottle flakes were put into production, plus 400,000 tons of production were converted, a total of about 4.2 million tons were added, and the production capacity growth rate was as high as 34%!
From the perspective of the industrial pattern of polyester varieties, the overall production capacity growth rate has maintained high growth, the growth rate of filament production capacity has slowed down significantly, the growth rate of staple fiber production capacity has been maintained, the production capacity growth rate of bottle flakes is facing a substantial increase, and the polyester bottle flakes industry is facing survival of the fittest, and the industry reshuffle has intensified.
(4) Staple fiber: the growth rate of production capacity remained stable
In 2023, 780,000 tons of polyester staple fiber will be newly put into production, and the production capacity growth rate will be about 87%。In 2024, it is expected that two sets of units are planned to be put into operation, with a total production capacity of about 600,000 tons and a capacity growth rate of 61%, the overall production capacity growth rate remained stable.
(5) Ethylene glycol: the growth rate of production capacity is reduced
Domestic ethylene glycol has entered the peak period of production since 2018, and the average annual growth rate of production capacity since 2018 is about 237%, which is three times the current production capacity at the end of 2017. With the growth of production capacity, China's ethylene glycol has steadily increased, and the import dependence pattern has changed, from about 60% in 2018 to 30% at present.
For 2024, ethylene glycol is planned to be put into production of about 1.9 million tons, and the capacity growth rate will drop to 66%。Overall, the pressure on new capacity is expected to ease.
(6) Summary
For the polyester product chain, the biggest pressure on production is PTA, and the growth rate of production capacity remains highThe least number of productions is PX, and the next few years will be relatively sporadic production;The growth rate of polyester production capacity has returned to normal, but the varieties are differentiated, the filament production is the least, and the production pressure of bottle flakes is the largestThe pressure on ethylene glycol production is expected to slow down significantly.
3. Logical analysis of variety pricing
Before the pricing logic of the variety, two key factors need to be analyzed, one is that as the king of commodities, its trend will affect the pricing of various assets. Another point is how the demand performance of the terminal textile industry is, after all, agricultural products look at the first, and industrial products look at demand. However, the author is not good at the analysis of the above two contents, and only provides humble opinions.
(a).
*In terms of outlook, the core focus of the impact in 2024 is whether the recession will be realized in the United States under the condition of high interest rates, and to what extent it will be, which is the potential negative impact of ***;Secondly, it is the production policy of the Organization of the Petroleum Exporting Countries (OPEC) and its allies (such as Russia, etc.), if OPEC+ continues to support oil prices through production cuts, then there is strong support for oil prices.
Judging from the recent situation, when the price is lower than $70, OPEC+ is quite willing to cut production and raise pricesIf the price is higher than $100 barrels, the U.S. will increase its efforts to suppress inflation.
Judging from the ** cycle, it is still in the ** stage.
(2) Textile and garment demand
In terms of terminal textile and garment demand, in terms of domestic demand, the domestic growth rate may slow down in 2024, and the completion of real estate may fall into a weakening trend, which will drag down the demand for home textiles. In terms of export sales, according to the CCF report, the inventory of overseas wholesalers has dropped significantly, and it can even be said that it has entered the tail end of destocking. However, while absolute inventories are declining, sales are also slowing down, so the decline in the inventory-to-sales ratio is lagging behind, and there is still a large distance from the pre-epidemic level. In the later stage, it is necessary to wait for the terminal sales to pick up, and the inventory cycle will transition from the current active destocking to passive destocking and then to active replenishment. At present, the market is happy to think that the United States will end the destocking cycle in the second quarter of 2024 and gradually enter the replenishment cycle, so China's foreign trade is expected to gradually pick up in the second quarter of next year, but if it is pessimistic, it may be in the second half of next year.
(c).pxSupply and demand pattern and pricing analysis
In 2024, PTA plans to put 9.5 million tons into production, and PTA's demand capacity for PX is about 6.23 million tons, but PX plans to put about 3 million tons into production. In 2025, PTA plans to produce 6.2 million tons, and PTA's demand capacity for PX is about 4.06 million tons, but PX plans to put about 1.3 million tons into production. From the above, it can be seen that the domestic PX demand capacity in the future is much greater than the production capacityDomestic PX is facing increasing tension and needs to be supplemented by imports, and import dependence is expected to rebound.
Due to the fact that PTA will be put into production more next year, after the new device is put into operation, the old device will be forced to stop, the overall industry may decline, and the output growth rate is not necessarily high, so the supply and demand of PX can be pushed from the demand for polyester.
In the past 10 years, the average growth rate of polyester production is about 7Around 7%, the lowest growth rate is in 2022, and the output has decreased by about 1%, and there are significant differences between the macro background and previous years, which can be disregarded;The highest growth rate in production is this year, which is expected to be 17About 3%, mainly because the base was too low last year. After deducting these two years, the growth rate of polyester production is about 7About 6%, the output of polyester increased by about 5.05 million tons.
According to the increase in polyester, the demand for PTA will increase by about 4.32 million tons, considering the overall surplus of PTA next year, assuming that the cumulative inventory is about 1 million tons, the total increase in PTA will be about 5.32 million tons, and the demand for PX will increase by about 3.5 million tons.
The core of the impact of PX** is whether the oil blending demand can be sustained, and we analyze it based on the concentration assumption
1) If the oil blending demand continues, the domestic stock** will remain the same as in 2023, taking into account the increase brought by the commissioning of some units in 2023, about 1.2 million tons, and imports will remain the same. The PX supply and demand shortage is 2.3 million tons.
2) If the blending demand is no longer sustainable and the operating rate of PX rises to a high of around 79%, domestic production is expected to increase by 2.7 million tons. In 2021, without oil blending, PX imports will be around 13.5 million tons, with room for increase of 4.27 million tons. The total PX** can be increased by about 7 million tons, which is equivalent to a surplus of 3.5 million tons of PX**. From this point of view, there is room for improvement in imported and domestic production, which can alleviate the excessive tension of PX.
3) Judging from the current situation, the logic of oil transfer is expected to weaken tomorrow, and the specific degree is difficult to estimate.
In the case of tight supply and demand, the benefits of PX depend on the bearing capacity of PTA and polyester to raw materials (the ** of PTA is limited by the bearing capacity of polyester), and from 2010 to 2013, the downstream production is highly profitable, so PX has windfall profits. From 2014 to 2017, downstream PTA and polyester margins were generally weak, and the benefits of PX were significantly reduced compared to previous years. In 2018, the downstream profits were restored, and the profits of PX also increased significantly, which once again proved that the profits of PX depend on the bearing capacity of PTA and polyester to raw materials.
In the case of PX's loose supply and demand, PX's pricing lies in its own cost pricing. For example, from 2019 to 2021, affected by the commissioning of large domestic refining and chemical projects, domestic PX production increased, PX profits were continuously compressed, and the PX-** price spread was suppressed by a minimum of 200 US dollars per ton (2020).
Since 2022, affected by the Russia-Ukraine conflict, gasoline and diesel cracking profits have been very high, aromatic hydrocarbon blending has reduced the ** of PX, and the benefits of PX have rebounded, resulting in tight supply and demand of PX.
To sum up, if the supply and demand of PX are tight, it is necessary to pay attention to the downstream situation and the restriction of the space above PX**. Referring to the above analysis for 2015-2017, the spread between PX and ** is in the range of $350-520 per ton. If the oil blending logic continues, compare 2023 and 2022. If PX** is sufficient, refer to 2019 and 2021.
(iv).ptaSupply and demand pattern and pricing analysis
The surplus of PTA seems to be more certain, in the context of PTA's continuous production, PTA processing fee of more than 500 yuan tons is considered high (the whole industry is almost profitable), 300-500 yuan tons should be reasonable, 200-300 yuan tons are slightly underestimated (all losses in the whole industry), 200 yuan tons are difficult to sustain for a long time. You can use this as a reference to price your PTA. Therefore, for the pricing reference of PX, you can pay attention to the processing fee of PTA, which is less than 300 yuan ton, and you need to be wary of the negative feedback brought by downstream PTA.
(5) Short fiber supply and demand pattern and pricing analysis
For next year's staple fiber, the production capacity will increase steadily, the demand is difficult to exceed this year, the overall supply and demand are stable, you can refer to the profits of the past two years for the staple fiber pricing, about 300-500 yuan tons.
(iv).Annual outlook for the polyester industry chain
Looking ahead to 2024, the polyester product chain:
From the perspective of the production cycle, the increase in production is PTA (to add insult to injury, the industry's profits will still be on the edge of the profit and loss of mainstream devices);The least is px (adding fuel to the fire, which will try its best to devour downstream profits, resulting in a great contradiction between upstream and downstream profits);Polyester production capacity has returned to normal (as usual, mainly depending on the terminal digestion capacity);The pressure on ethylene glycol production is expected to slow down significantly (the supply and demand margin is gradually expected to improve).
From the perspective of variety hedging, PX is a multi-allocation, multi-PX short PTA, multi-PX short **, PX positive set (depending on the contradiction between upstream and downstream processing fees);PTA air distribution (look at the processing fee, high air configuration);Ethylene glycol does absolute ** improvement (it also depends on the cost), in the early stage of high inventory depletion, the trend of intertemporal spread may not be as unilateral.
You can use the price difference between varieties to make a reference for pricing or valuation: PTA processing fee of more than 500 yuan tons is considered high (the whole industry is almost profitable), 300-500 yuan tons should be reasonable, 200-300 yuan tons are slightly underestimated (all losses in the whole industry), and 200 yuan tons are difficult to sustain for a long time. For the participation of PX pricing, you can pay attention to the processing fee of PTA, and when it is less than 300 yuan ton, you need to be wary of the negative feedback brought by downstream PTA. Down, you can pay attention to the spread of PX-**, if it is less than $350 ton, PX is undervalued. For next year's staple fiber, the production capacity will increase steadily, the demand is difficult to exceed this year, the overall supply and demand are stable, you can refer to the profits of the past two years for the staple fiber pricing, about 300-500 yuan tons.
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Important: This report strives to be objective and unbiased in its contents, citations and data. Reliable, accurate and complete to the best of its ability, but does not guarantee the accuracy and completeness of the information stated in the reportThe information provided in this report is for reference only and is not used as the basis for investment decisions。Investment is risky, and you need to be cautious when entering the market.