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Who will seize the refining and chemical opportunities among the Big Four?

Update:2021-04-16
Abstract:

Talking about the Four Little Dragons Series (1) Strate […]

Talking about the Four Little Dragons Series (1) Strategy:

Experts first: talk about the tremendous changes in the polyester industry pattern and the speed of life and death of the industrial chain layout

1. Polyester chemical fiber industry chain: From polyester to PTA and then to PX, the pattern of the industry's development towards the entire industry chain has changed dramatically

We know that the main raw materials of polyester come from the petroleum refining industry. Crude oil obtains naphtha through atmospheric and vacuum distillation and other technological means, and then uses naphtha to extract aromatic hydrocarbons to prepare para-xylene (PX) or crack ethylene to produce ethylene glycol (MEG). PTA and MEG are polymerized to produce various polyester products . Today, the entire industrial chain of "crude oil-aromatics, ethylene-PTA, MEG-polyester" has developed very mature. The products involve many industries, consumer categories, and people’s clothing, food, housing, and transportation. They have become a basic industrial material. It has an increasingly mature technology and process path and a solid growth in market consumption foundation. Among them, "PX-PTA-polyester" is the core of the entire industrial chain business. The four small refining and chemical dragons Hengli, Rongsheng, Tongkun, and Hengyi have basically followed this line from downstream polyester to midstream PTA to Upstream PX's industrial upgrade climbs the road.
(1) Overview of polyester: the boom drives the industry to return to the expansion channel. It has the dual attributes of chemical industry and consumption. The scale, cost and technology accumulation of the industry are both important

Historically, 2011 and 2012 were the peak periods of my country's polyester production capacity, which led to a low ebb of the industry's supply and demand. Since then, the speed of industrial production capacity has dropped to the bottom in 2016. In recent years, with the steady growth of domestic consumption and the continuous upgrading of the structure, the demand for polyester, especially differentiated functional products, has maintained a steady growth. The industry has gradually achieved an improvement in supply and demand and has begun to recover from the end of 2015. The current demand is strong. Maintain the operating situation of high start-up, low inventory and high spreads.

Figure 2: Polyester polyester POYproduction capacity: returning to the expansion channel, supply tension is expected to ease

Due to the low investment intensity and approval barriers and the stimulus for the overall profitability of the industry, starting from 2017, polyester production capacity has re-entered the expansion range. In 2017, the new production capacity was 2.5 million tons, a growth rate of 5.45%. In 2018, the market is expected to have nearly 30 new polyester plants and about 6.47 million tons of new production capacity put into operation. This will be a peak year for production. From the current TMT and Barmag Looking at the waiting period for winding head orders, this expansion will continue until 2020. Therefore, there is a high probability that the current tight supply of polyester will tend to ease year by year.

The cost of scale of competition in the polyester industry is very important. However, due to the strong consumption attributes of products and the different supply and demand structures of various market segments, especially in the polyester industry where the Four Dragons are located, the profitability of differentiated products is generally higher than that of traditional products. Companies with different technological R&D levels will have relatively large differences in the profitability of products of the same specification. From this perspective, Hengli and Shenghong in the industry are known for their R&D and differentiation, Tongkun and Xinfengming are well-known for their large-scale production, and Hengyi and Rongsheng focus on the mid- and upper reaches of the company. The technical accumulation of downstream polyester is not Too much, not as good as the above four professional polyester chemical fiber enterprises.

(2) Overview of PTA: The optimization of supply and demand has promoted the industry from falling into silence to a complete recovery. Product shortages have intensified and entered a new normal. The advantage of large-scale cost is the key to profit

The two years of 2012 and 2014 were the peak of the PTA installation, and the production capacity was severely surplus. After entering 2015, the industry's production capacity growth rate has slowed down significantly. In 2016, Hanbang was only 2.2 million tons. In 2017, there was almost no new production capacity. There is also only 2.2 million tons of Jiaxing Phase II. Driven by downstream polyester demand, the industry has gradually recovered from overcapacity and recovered in the second half of 2017. Especially since August this year, the industry’s boom has been rapidly rising, and social inventories have dropped to 70. At a historically low level of about 10,000 tons, product prices have risen sharply. The current spread has widened to about 1,800 yuan, and the profit per ton has returned to the historical high range of more than 1,000 yuan.
The PTA capacity construction cycle is generally about three years, and the investment intensity is also relatively high. The current production project is expected to wait until the end of 2019 for the recent 2 million tons of Xinfengming and 2.5 million tons of Hengli. Therefore, it is difficult to see others from 2018 to 2019. With the addition of new production capacity, there is a two-year production gap period, and the downstream polyester production capacity has returned to the expansion channel, the situation of tight supply in the PTA industry has changed from a sign of discussion to an undisputed reality, and it has become more and more intense. , This situation will become a medium-term industry normal, which is difficult to reverse in the short term.

PTA belongs to a typical partial petrochemical industry. The core competitive advantage of industry enterprises is based on the cost advantages of technology and production capacity. At present, the production capacity of Hengli Petrochemical and Yisheng in the industry is relatively new, and the monomer and overall scale are both large. The advantages of influence and scale and cost are the most prominent, ranking first in the country. The capacity and quality of the 2.2 million tons of Tongkun Jiaxing line is also relatively good, but the total production capacity has not yet reached the scale, and the raw material self-sufficiency rate for downstream polyester is also insufficient.
(3) Overview of PX: The last link missing in the polyester industry chain, the most difficult and scarce capacity allocation in the industry, Hengli Refinery and Zhejiang Petrochemical's two star projects will be put into operation soon

In 2017, the domestic PX production capacity was 14.4 million tons, accounting for about 25% of the world’s total. Although it also ranks first in the world, its process is short, the monomer scale is small and scattered. The largest such as CICC and Tenglong have only 1.6 million tons. Capacity upgrade is imminent. Due to environmental pressures, public opinion, etc., there has been almost no new production capacity in the country for many years, and the industry's supply and demand is also severely unbalanced. It mainly relies on imports from Japan and South Korea. In 2017, domestic production was 10.19 million tons, imports were 14.26 million tons, and consumption was 24.37 million tons. , The degree of dependence on imports increased to 58.4%, and the first half of 2018 reached a historical high of more than 60%. The gap further widened and became the last missing link in my country’s polyester industry chain. This is also the government's encouragement to several private refining companies in China. The main reason for the rapid start of the project.

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