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Insight | Time: Oct 29 2020 9:31AM
PBT plants to start intensive turnaround in November
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Price of BDO rapidly increased since Aug, up to current 10,350yuan/mt from 7,400yuana/mt, with increment at 2,950yuan/mt or 37%.

Price of PTA was in range bound relatively, with spot price fluctuating around 3,200-3,600yuan/mt.

Comprehensive PBT polymerization cost ascended on increasing BDO market, up to current 7,350yuan/mt from 6,250yuan/mt, with increment at 1,100yuan/mt or 17.5%.

Sep and Oct are traditional consumption season for PBT. Operating rate of twisting units PBT section was high in Taicang. With ascending cost, price of PBT chip and fiber also climbed up. Price of PBT chip, POY50D and DTY50D increased to 8,800yuan/mt, 10,200yuan/mt and 13,000yuan/mt respectively from 6,350yuan/mt, 8,400yuan/mt and 11,500yuan/mt, with increment at 2,450yuan/mt or 39%, 1,800yuan/mt or 21% and 1,500yuan/mt or 10% respectively.

Demand for PBT chip and fiber grew with rising price, but the cash flow was meager. Most PBT plants were under losses in Sep and were near cost line in Oct.

Price gap of DTY50D and spandex 40D enlarged apparently, up to 20,000yuan/mt in Oct from 16,000yuan/mt in Aug.

Good demand for spandex is supposed to further stimulate price of spandex and its feedstock BDO in later period, but demand for PBT fiber has started weakening. PBT market may face pressure from losses and accumulating stocks.

Therefore, some PBT plants have released production cut plan for Nov. By now, 3 PBT polymerization units totally covering 200kt/year of capacity (80kt/year from Xingsheng, 60kt/year from Xingchen and 60kt/year from Meizhouwan) will have turnaround in Nov, accounting for 18% of the total capacity. In addition, some plants intend to slash run rate. Generally, the operating rate of PBT plants may reduce to around 60-70% in Nov, meaning the consumption of PTA to decrease by around 21kt m-o-m in Nov and the usage of BDO to fall by around 13kt.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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