PTA has fallen sharply driven by the cost side. At the same time, PTA is in a situation where supply exceeds demand, and the pressure on inventory accumulation continues. It is expected that PTA will have higher inventory logic in the market outlook, and short selling operations will continue. Strategy: TA2005: Continue short selling.
Since February, the PTA futures market has fluctuated and risen after hitting the bottom, while the PTA spot market has fluctuated, with spot prices mostly fluctuating around 4300-4380. From the perspective of production efficiency, due to the steady upward trend in PX prices after the holidays, the processing difference fluctuates between 350-480. From the perspective of supply and demand, due to the inconsistency in upstream and downstream construction, PTA’s accumulated pressure has increased, and the multiple indicators have refreshed historical extreme values.
Cost side:
The trading atmosphere in the PX market is average. The main reason is that ACP is negotiating. This month, ACP negotiations failed, and the final negotiation range was 640-640. 820 US dollars/ton CFR Asia. It is understood that PX shipping goods have been trading normally recently, but a few PTA companies have experienced storage tank explosions. In terms of price, as of February 28, the closing prices of the Asian PX market were US$687.33/ton CFR China and US$669.33/ton FOB South Korea, which were 8.4 and 8.6 percentage points lower than last week and 13.22 and 13.52 percentage points lower than before the holiday. Judging from the domestic situation, the February settlement price of Sinopec PX was 6,100 yuan/ton (cash 6,070 yuan/ton), which was 600 yuan/ton lower than in January. The listing price in March was 6,200 yuan/ton, which was 100 yuan/ton lower than in February.
Demand side:
Affected by factors such as the epidemic, the accumulation of inventory of polyester products and the return of employees, the start-up load of polyester showed an early trend in February. After a high and then low trend, the polyester load dropped from 67.4% at the beginning of the month to around 59%. Polyester in February is estimated to be around 62~63%, and polyester output is around 2.9 million tons. Looking back at history, the load in February hit a new low in nearly seven years. However, downstream companies are gradually resuming production. Although the arrival of workers and material preparation are still the main factors restricting the increase in factory load, various regions have successively introduced strict prevention and control measures to resume work in an orderly manner. The worker attendance rate is tending to increase, and logistics and transportation are also increasing. There has been a slight improvement, but vehicle traffic is mainly local people and vehicles, and there are still certain restrictions on foreign vehicles and people in some areas. Last week, the transaction atmosphere of polyester factories was acceptable, and the market quotations fluctuated little, but the actual transactions were mainly based on negotiations. As of February 27, the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang was around 38%, an increase of 22 percentage points month-on-month, and the growth rate was 13 percentage points faster than last week. It is optimistically estimated that the comprehensive operating rate of chemical fiber weaving in Jiangsu and Zhejiang regions may rise to around 70%-80% on March 10.
Supply side: PTA inventory accumulates nearly 100 in a single month
And PTA installations remain mostly during the Spring Festival Normal levels. Although affected by inventory after the holidays, some devices dropped their load, but the decline was relatively limited, falling from a high of 89% at the beginning of the month to a low of around 78%. According to the current maintenance plan, the output in February is expected to be around 3.5-3.6 million tons. Therefore, PTA supply and demand accumulation pressure has increased sharply, and the accumulation range in a single month has expanded to around 900,000 to 1 million tons, which is also a record high.
Social inventory may exceed 3 million tons
In addition, PTA’s total social inventory also hit a new high. According to the accumulation range in February , by the end of February, PTA social inventory is expected to exceed 3 million tons. In the early stage, the highest social inventory was around the first quarter of 2015, when the social inventory was around 2.5 to 2.6 million tons. Judging from the inventory-to-sales ratio, the current inventory-to-sales ratio has reached the level of more than 30 days, which has tied the high point in recent years.
Looking at the market outlook, as there are still not many maintenance plans announced by PTA in March, the supply of PTA is still relatively high. As various regions actively help workers return to work, As the downstream work resumes at a faster pace, the polyester load is expected to gradually increase in March, and the accumulation of warehouses will converge significantly. Considering that the current PTA social inventory base is large, there are still constraints on PTA prices in the short term. On the other hand, the current PTA processing difference is at a low level, and attention is paid to the impact of PX costs on PTA prices. </p
