According to the exposure draft, the trading code of p-xylene futures contract is PX, the trading unit is 5 tons/lot, the minimum price fluctuation is 2 yuan/ton, the daily price fluctuation range is limited to 4% of the settlement price of the previous trading day, the minimum trading margin is 5% of the contract value, the contract month is 1- 12, and the last trading day and the last delivery day are/of the contract month respectively. See table 1 for other details.
What is p-xylene? What is the current supply and demand pattern of the industry, and what are the main factors affecting price changes? Follow the questions below to bring you the basic knowledge about PX.
(I) Introduction of p-xylene industry
1. What is p-xylene?
Para-xylene, English name: Paraxylene, abbreviated as PX. It is an important organic chemical raw material, mainly used to produce purified terephthalic acid (PTA), which reacts with ethylene glycol to produce polyethylene terephthalate (PET), that is, polyester. In addition, PX is also used as raw materials for producing resins, coatings, fuels and medicines, and is widely used in various fields of national economy such as chemical fiber, construction and electronics. From the production process, PX belongs to light aromatic hydrocarbon. At present, domestic industry generally adopts aromatic hydrocarbon combination and xylene isomerization technology to prepare PX. According to the statistics of Zhuo Chuang Information, 94% of the existing domestic capacity devices are co-production of aromatic hydrocarbons, and 6% are isomerization of xylene.
2. What is the current supply pattern of p-xylene industry?
In recent 10 years, the global PX production capacity growth is relatively stable, and it is generally in an upward cycle, mainly in Asia, especially in China. Since 20 19, with the completion of a large number of projects, especially a number of large-scale private refining and chemical projects in China, the PX production capacity has been greatly improved, and the global production capacity will be about 8010.5 million tons in 2022. Judging from the distribution of global PX production facilities, Asia's production capacity is far ahead, occupying an absolute dominant position. In 2022, Asia's production capacity was 6610.3 million tons, accounting for 82.5% of the global production capacity; Within Asia, PX production capacity is mainly distributed in China, South Korea, India, Japan and other regions and countries.
Domestically, in 2022, China's PX production capacity is about 35.86 million tons, and there are about 26 manufacturers with relatively concentrated production capacity. In 2022, China PX capacity concentration (CR4) will be 66.2 1%. Among them, private enterprises account for the largest proportion. In 2022, the proportion of private, state-owned, joint venture and foreign-funded enterprises was 54%, 34%, 7% and 4% respectively. The main manufacturers are Zhejiang Petrochemical, Dalian Hengli, Hong Sheng Refinery, China Petrochemical and China Petroleum.
3. What is the demand of p-xylene industry?
In the past five years, the global consumption of p-xylene has increased year by year, with a compound annual growth rate of 4.52%. By 2022, the global consumption of p-xylene will reach 65 1.52 million tons. In terms of consumption scale and structure, China is the main consumption area of PX. According to the data analysis in 2022, China's consumption accounts for 54% of the world's total consumption, while consumption in other regions accounts for a small proportion compared with China.
In the downstream consumption field, the consumption structure of PX is relatively simple. About 99.5% of PX in China market is used to produce PTA, and only 0.5% of products produce DMT and other products. From the perspective of downstream consumption structure, PX is an important raw material of polyester industry, and its fundamentals and price changes have great influence on downstream.
4. What are the main factors that affect the price of p-xylene?
According to past experience, the factors affecting the price of PX, in addition to its own fundamental situation, also need to focus on the following aspects:
First, the impact of crude oil prices on PX prices. Crude oil is the source of PX, which is close to crude oil in the industrial chain. By comparing the prices of crude oil and PX in history, it is found that their trends are basically the same. The ups and downs in some stages are different, mainly due to their own fundamentals.
Second, the influence of oil adjustment demand on PX price. As the direct raw material of PX, mixed xylene can also be used as blending oil to improve the octane number of gasoline and diesel. Therefore, when the demand for gasoline and diesel oil is good and the profit is high, mixed xylene is more used as the demand for blending oil, so the part used to produce PX is reduced, resulting in a decline in PX output. The phased shortage of supply makes the supply of PX in short supply, and the price of products rises, especially in 2022.
Third, the impact of seasonal maintenance on PX price. The supply of PX industry has obvious seasonality during the year, because the industry will generally have large-scale maintenance in the second quarter, so the expected decline in supply will lead to an increase in PX prices. In addition to the above-mentioned main factors, the fundamental changes of products related to the industrial chain will also have an impact on the price of PX, and the change of PTA construction in the downstream will have different degrees of impact on PX demand. As well as the changes in the overall macro environment, it will also form feedback of demand, which in turn will affect the price of PX.
(B) the significance of futures listing
As can be seen from the basic situation of PX industry, PX industry as a whole has the characteristics of large scale and rapid development, and occupies an important position in China's polyester industry and even the downstream textile industry. However, because the dependence on imports is still at a high level of more than 30%, the domestic pricing power is weakened, and the price of PX is frequently affected by crude oil prices and macro-environment, so the business risks of enterprises are greater.
The listing of futures is of great significance to the development of the industry. From the perspective of products and industries, the listing of p-xylene futures can provide a more transparent price discovery tool for the spot market and enhance the price transparency of the industry. And it can reduce the impact of price change risk on the profitability of enterprises and realize risk management and control of enterprises. At the same time, from the perspective of industrial chain, as an important raw material of polyester industrial chain, it can be combined with downstream PTA to better realize risk hedging and arbitrage, which is also conducive to the smooth operation of downstream polyester products and textile industry.
(Zhuo Chuang Information Zhang Feng)