Supply/demand pattern in polyester market unchanged despite of increasing turnaround

Downstream plants successively started having holiday from mid-Jan. More polyester units confirmed turnaround plan, and some large plants increased maintenance schedule.

Next intensive turnaround may appear in end-Jan or early-Feb and most polyester plants are expected to resume near the Lantern Festival (Feb 26).

Polyester polymerization rate is expected to decrease after some large enterprises released turnaround plan, which may curve a similar tendency like 2018. The polyester polymerization rate is estimated to be 83-85% in Feb.

MEG spot/EG2105 spread strengthened apparently, to 180-200yuan/mt, and spot caroges showed clear premium to paper goods. For companies having turnaround, they can sell spot goods and buy forward goods and obtain gains theoretically. The polyester polymerization rate is estimated to be around 84-85% in Feb and may decline to 83% if more plants start maintenance.

If the restart of some units is delayed, the Feb polyester polymerization rate is expected to be weighed on.

Of course, this level is still higher than the same period of pas years. Supply and demand of polyester industrial chain does not have big change. PTA stocks accumulate but there are still storage capacity. Stocks of MEG are expected to remain not high and those of polyester fiber plants are limited. Market players hold expectation toward demand after the Spring Festival holiday.