PX continues to lose, how far is the production cut?Perhaps not as bad as manufacturers think

2022-06-09 0 By

Recently, the word “loss” is often mentioned by traders. Not only PX industry, but also most chemical products have seen production loss, especially the closer to the end of the product, the greater the loss, while products closely related to crude oil, the faster the cost transmission, relatively small loss.Since the conflict between Ukraine and Russia intensified, crude oil has remained high, while the fundamentals of downstream products have not changed much. The cost is only forced to rise, and the cost transmission is not smooth, which is the main reason leading to the loss of most products.Will PX manufacturers cut production if the PX continues to lose money?Speaking of PX production loss, it is also a state that only appeared in recent years. The turning point of PX industry profit was in the third quarter of 2019. Before this point, there was no loss in PX industry, which can be said to be a high-profit product.Since the fourth quarter of 2019, PX has maintained a continuous loss.So will the company reduce the negative load or stop production under the loss of PX production? Some analysts believe that the current loss has little impact on production.The main reasons are as follows: 1. PX losses since 2022 have not been as big as expected. Calculated using naphtha as raw material from the beginning of the year to now, the average loss is about $71 / ton, which is significantly lower than the loss in the fourth quarter of 2021.Two, if the parking so affected the scope is too large, at present, the domestic large PX enterprises are refining and chemical integrated device, and the non-refining and chemical integrated device is also basically aromatic joint device, aromatic joint device at the same time the output of triphenyl, which isomerized xylene PX output, assuming that the PX device is stopped, the output of the raw material xylene can not be digested.Similarly, large-scale PX plant is equipped with downstream PTA plant. Unless the PTA plant and PX plant stop production at the same time, new problems will be faced and the supply of polyester raw materials will be interrupted. Therefore, in the complete industrial chain mode, it is impossible to stop production because of the loss of PX.Of course, some devices are a separate MX-PX device, but there are only three domestic devices for this production process, among which the 800,000 tons/year PX device of Sinochemical Quanzhou is in normal production, and a 1 million tons/year PX device of Hainan Refining and Chemical has been stopped since December 28, 2021.It is planned to resume production in May, and the 600,000 tons/year PX plant of Sinochem Hongrun has been shut down for a long time due to losses. The shutdown of these two sets of plants has a very limited impact on the market.So only the whole industry chain in the high and loss for a longer time, will appear in the whole production or stop, or unilateral parking will damage the downstream customers, especially the PX are long supply mode, less possibility for loss of parking, is only in the slight adjustment of the load current losses, affect the market supply is very limited.(Source: Jin Lianchuang Chemical) More content in China Textile Magazine