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Insight | Time:Oct 18 2016 3:38PM
PX market in coming 5 years
 
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Asian PX prices experienced limited fluctuation in the past months, even no sharper than that of PX-naphtha spread. In face of such plain market, some players move eyes onto PX market prospect in coming years.

What is PX market like in 5 years? The answer is still localization, though schedules may not totally come true. Around 2019-2020, PX capacity expansion in China is likely to reach peak.



Compared with that in 2015, PX capacity in China is probably to double by 2021.

In terms of imports, by 2021, China's PX import dependence may decline to around 25%.



This means in 5 years, PX capacity in China would hike from current 14.4 million tons per annual to around 28 million tons per annual. If production reaches this level, the market shares of imported materials will be almost eclipsed.

In China, PX capacity has been growing slowly while the public consensus is usually on the opposite of PX projects. In this circumstance, fast capacity expansion of PX is attributed to the open of refining industry to private companies which are usually far more efficient than state-owned companies in investment.

Even excluding the probably unaccountable schedules, there are over 10 million tons per annual of schedules around 2019-2021, including a 4 million tons per annual project which will be the largest one in the world.

Country Project Capacity (KTA) Remark
2016
India Reliance 2300 Q4, 2016
Total in 2016   2300  
2017
Saudi Arabia Aramco Jazan 650 H2, 2017
Vietnam Nghi Son 700 trial operation in Q2, commercial operation in H2
China second phase of CNOOC Huizhou Refinery 850 H2, 2017 (likely to be delayed)
South Korea HTC 200 expansion of second line in Q2, 2017
Saudi Arabia PetroRabigh 1340 Q2, 2017
Total in 2017   3740  
2018-2020
China Zhejiang Petrochemical 4000 2018-2019
India Indian Oil 400 2018
China second phase of Hainan Refinery 700 2018
Russia Bashneft 100 expansion 
Brunei Hengyi Petrochemical 1500 2018
China Sinochem Quanzhou 1600 2018-2019
China Second phase of Zhongjin Petrochemical 1600 2019-2020
China Hengli Petrochemical 2000 2019-2020
China Shenghong Refinery 1500 2019-2020
Total in 2018-2020   10,000+  


If the schedules all commence, localization of PX will basically complete in 5 years. At that time, the system that USD PX spot price dominates the market pricing will exit while imported materials will nearly retreat. Most domestic large PTA plants will have sufficient PX supply.

Besides, fast capacity expansion will lead to additionally unforeseeable consequences and new market models.
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