Chen Canzhong, Deputy General Manager of Hengli Petrochemical (Dalian) Co., Ltd. delivers his report of Change of PX trading pattern with localization of supply

 The report was divided into three parts.

In the first part, Mr. Chen made a review on PX market in 2022. In the beginning of the year, with expectation of launch of PX futures on Zhengzhou Commodity Exchange, increasing demand and tight supply in Q1, PX market came under spotlight with much attention. PX price rose in H1 2022, but uncertainties increased in recent years. PX plant operating rate was not high, and some plant operation was unstable.

Secondly, PX trading pattern could change. Though the delivery of core equipment was delayed, China domestic PX production increased with dependency rate on imports dropping. In addition, affected by the feedstock, PTA plant operating rate fluctuated heavily, and thus the supply and demand balance was impacted. With rising domestic PX supply ratio, the factors influencing PX pricing increased, and the Asian Contract Price system dominated by Japan and South Korea was under challenge.

Thirdly, Mr. Chen forecast that PTA processing spread could keep stable under normal circumstances, and it could paint a rosy picture in the next 3-5 years. With PX-naphtha spread hitting years’ high, it provided incentive to PX plant operations. As new plants are large in size, the market could be impacted by plant operations more frequently.