Introduction: Spring is the season when all things revive. Because of the rhythm of spring, greenery sprouts, and because of the nurturing of spring, all the good things begin. After entering the new year of 2021, against the background of loose global liquidity and gradual economic upward trend, coupled with inflation expectations, the PTA market will also follow the rise of commodities this year. In March, PTA experienced both high and low limits within half a month. The spot price rose from 3940 yuan/ton on February 10, 2018 to 4720 yuan/ton after the Spring Festival, an increase of 19.80%. Then the market began to fall to 4505 yuan/ton, a decrease of 4.55%.
Source: Longzhong Information
Recently, PTA has shown two postures of rising and falling. The time dimension of the rise is from the return of the Spring Festival to last weekend. It has fallen this week. We tentatively classify it as a short-term correction. Starting from March 4, PTA fell for two days and then showed an upward trend. Let’s first talk about several factors of the increase. First of all, the increase of PTA must be driven by the cost side. Let’s sort out the costs one by one. U.S. commercial crude oil inventories have increased since the Spring Festival holiday, but the sharp drop in production caused by cold wave weather has not yet fully recovered. Distillate oil inventories have declined. In addition, the United States has accelerated vaccination, and international oil prices have set a new record in early January last year. The price of crude oil Brent rose to a maximum of $67.04 per barrel. We can clearly see that PX faces a continuous destocking phase after March, and maintenance is relatively concentrated. The price of PX rose from US$745/ton on February 10 to US$896.33/ton, an overall increase of nearly 20.31%. At the same time, the spot price of PTA rose from 3,940 yuan/ton to 4,720 yuan/ton, an increase of 19.80%. At the same time, bulk commodities are also rising. Although PTA is not the dazzling and strong one among bulk chemical commodities, for PTA itself, the bottom is gradually rising. Under the condition of strong costs, it is still believed that PTA lacks room for decline.
PTA supply and demand trend from 2019 to 2021:
Source: Longzhong Information
In addition to the strong support on the cost side, the supply and demand side of PTA is also the key to supporting the rebound in PTA prices. From the supply side, nearly 20 million tons of PTA units are expected to face maintenance in March and April. This is undoubtedly A major benefit to the market, Yisheng Hainan’s 2 million-ton PTA production line was shut down for maintenance on February 11 and plans to restart on March 20; Reignwood Petrochemical’s 1.4 million-ton PTA production line was shut down for maintenance in early March, and Hengli Petrochemical’s 2.5 million-ton unit is expected to It entered maintenance on March 6, and there will be a rotation inspection plan for the two sets of equipment thereafter. The second phase of the Honggang 2.5 million-ton PTA production line is scheduled to be put into operation successfully on March 3. Based on calculations of the restart and maintenance of domestic PTA devices, the overall monthly average load of domestic PTA is expected to be around 80% in March, which is about 3% lower than in February, with monthly supply of 4.4 million tons. From the demand side, the current polyester load has increased to 90.42%. The start-up time and load increase speed of downstream polyester production are better than in previous years, and the profits of the polyester segment have improved. We expect the production of polyester in March to be 5 million tons. Therefore, judging from the supply and demand balance table above, there is a destocking of around 60,000 tons. In the case of upstream and downstream resonance, supply and demand provide strong support for PTA.
Recent PTA maintenance updates
Source: Longzhong Information
In the context of the recovery of the global economy and demand, downstream terminal weaving operations are also continuing to rise. From the perspective of crude oil-PX-PTA-polyester-weaving, PTA is currently showing a tight spot and processing fees are narrowing. At the same time, upstream and downstream are helping, so PTA may continue to maintain a strong trend. </p
