2020 First Quarter PX Market Operation Analysis (Price, Profit, Import And Export Situation)

Oil prices plummeted in the first quarter, and public health events caused domestic demand and exports to be suppressed. PX prices fell sharply. As of March 31st, PX price closed at 470.17 US dollars / ton CFR China, compared with December 31, 2019 fell 370.83 US dollars / ton; Sinopec March PX settlement price was 4760 yuan / ton, compared with 2019 December reduced 1995 yuan / ton.

1. Market Review

Figure 1 PX price trend

Source: lung Chung

The imbalance between supply and demand is serious. Oil prices in the first quarter are falling sharply. Meanwhile, public health events have led to the inhibition of domestic demand and exports, and PX prices have dropped sharply. As of March 31st, Brent oil price closed at 20.48 US dollars / barrel, compared with December 31, 2019 fell 45.52 U.S. dollars / barrel, or 68.97%. As of March 31st, PX price closed at 470.17 US dollars / ton CFR China, compared with December 31, 2019 fell 370.83 US dollars / ton; Sinopec March PX settlement price was 4760 yuan / ton, 2019 December reduced 1995 yuan / ton, the decrease was 44.09% and 28.94% respectively. From the decline point of view, the cost side decline is obviously greater than PX, PX enterprise profits rise, production intention is strong, stock rises.

2. profit analysis

Figure 2 PX profit analysis

Source: lung Chung

In the 1 quarter, PXN showed an overall upward trend, mainly due to:

1, public health incidents are serious, gasoline demand is poor, naphtha and gasoline cracking spreads are low.

In 2 and March, the unplanned shutdown of two sets of ethylene plants in South Korea and Malaysia hit a larger market for naphtha.

3, the demand for terminal weaving is flagging, but the PTA processing fee is high, and the production intention is strong and the PX market is good.

3. import situation

Figure 3 PX import situation

Source: lung Chung

In the 1 quarter, PX imports totaled 3 million 760 thousand tons, down 474 thousand and 700 tons compared with the same period last year, mainly due to the large domestic production capacity. Following the release of new plant capacity, PX imports will be further reduced.

4. inventory situation

Figure 4 PX import situation

Source: lung Chung

Due to shrinking demand, PX enterprises have strong production intentions. In the 1 quarter of 2020, PX social inventories rose month by month. As of the end of March, PX social inventories were close to 3 million 500 thousand tons, up 1 million 250 thousand tons compared with December 2019.

5. post market forecast

At present, the overall price of oil is low. Following the gradual weakening of the impact of public health events, the cost side has an upward trend, demand will slowly recover, and the price of PX will also go out of the trough. But because of the oversupply of PX market, the profit is expected to decrease.