Recently, the second phase of Hainan Yisheng Petrochemical project with a total investment of 8 billion yuan has been completed and entered the trial operation stage.

The total investment of the second phase of Hainan Yishheng Petrochemical project is about 8 billion yuan, including an annual output of 2.5 million tons of PTA equipment, an annual output of 1.8 million tons of PET equipment and wharf renovation and expansion projects, and supporting the construction of office buildings, cantons, fire stations and staff dormitories and other supporting facilities. After the completion of the project, Hainan Yisheng Petrochemical will increase the output value of about 18 billion yuan.

According to the relevant person in charge of Hainan Yisheng Petrochemical Co., LTD., Hainan Yisheng’s existing production capacity is 2.1 million tons of PTA and 2 million tons of PET. After the second phase of the project is officially reached, the total production capacity can reach 4.6 million tons of PTA and 3.8 million tons of PET, the total industrial output value exceeds 30 billion yuan, and the tax will exceed 1 billion yuan. And it will provide sufficient raw materials for the downstream petrochemical new material industry, help the Danzhou Yangpu petrochemical industry chain to further extend and improve, and contribute to the construction of Hainan Free Trade Port.

PTA is the upstream raw material of polyester. In general, the upstream raw materials of PTA industry chain mainly include PX from the production and processing of acetic acid and crude oil, and the downstream is mainly used for the production of PET fiber, of which civilian polyester filament and polyester staple fiber are mainly used in the textile and garment industry, and polyester industrial silk is mainly used in the automotive field.

2023 is in the second round of rapid capacity expansion cycle of PTA, and it is the peak year of PTA capacity expansion.

PTA new capacity concentrated production industry ushered in a new cycle of development

As of the first 11 months of 2023, China’s PTA new capacity reached 15 million tons, a record annual capacity expansion in history.

However, the centralized production of large-scale PTA plants has also reduced the average processing fees of the industry. According to Zhuo Chuang information data, as of November 14, 2023, the average PTA processing fee was 326 yuan/ton, which fell to a near 14-year low and was in the stage of industry-wide theoretical production losses.

In the case of gradually declining profits, why is the domestic PTA plant capacity still expanding? Industry insiders said that due to more PTA capacity expansion in recent years, the industry competition pattern has intensified, PTA processing fees have continued to fall, and most small devices have greater cost pressure.

In addition, in recent years, large private enterprises have expanded to the upstream industry, the integrated competition pattern has been formed and strengthened year by year, and almost all mainstream suppliers in the PTA industry have formed a “PX-PTA-polyester” supporting pattern. For large suppliers, even if PTA production losses, they can still make up for PTA losses through upstream and downstream profits, which has intensified the survival of the fittest in the industry. Some small devices cost a high single consumption, can only choose long-term parking.

With the continuous progress of science and technology, the capacity trend of PTA industry is developing in the direction of technology-intensive and industrial integration, and most of the new PTA production plants in recent years are 2 million tons and more PTA production plants.

Judging from the development trend, the vertical integration of large enterprises in the PX industry chain is constantly strengthening. Hengli Petrochemical, Hengyi petrochemical, Rongsheng Petrochemical, Shenghong Group and other polyester leading enterprises to supplement, in general, scale and integrated development will promote the PX-Ptas polyester industry chain from a single industry competition to the whole industry chain competition, leading enterprises will be more competitive and anti-risk ability.
Sources: Yangpu Government Affairs, China Business News, Process Industry, Network