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PTA recommends appropriate reduction of long positions in the early stage

Oil prices may loosen PK equipment for centralized maintenance High oil prices and low processing fees have prompted a sharp rise in PTA prices. Although oil prices may loosen in the later period, the improveme…

Oil prices may loosen PK equipment for centralized maintenance

High oil prices and low processing fees have prompted a sharp rise in PTA prices. Although oil prices may loosen in the later period, the improvement of the supply and demand pattern has provided new momentum, so the price of PTA The market is cautiously bullish.

Since February, PTA futures prices have gradually increased, but in the past two trading days, the increase has slowed down significantly. Yesterday, the main 2105 contract fell 1.89% to close at 4766 yuan/ton.

Cost support began to weaken

Affected by the rare severe cold weather in the United States, the consumption of heating oil downstream of crude oil surged, and international crude oil prices rose sharply. WTI crude oil Standing on the platform of 60 US dollars per barrel, hitting a new high in the past two years. At the same time, the cracking difference between naphtha and PX is at an extremely low level. In addition, the operating loads of the PX unit and the PTA unit fluctuated in February, and the price of PX also rose sharply. As costs rise, the operating conditions of PTA manufacturers continue to deteriorate. PTA processing fees once fell to a historical low of 200 yuan/ton. PTA prices have strong upward demand for repairs. Affected by this, PTA futures prices have accelerated since the end of January, with the main 2105 contract once rising from less than 4,000 yuan/ton to 5,000 yuan/ton, with a cumulative increase of more than 25%.

Overall, this round of accelerated growth in the PTA market is largely driven by the cost side, and its own supply and demand pattern has not changed significantly. At the OPEC+ ministerial meeting in January, Saudi Arabia voluntarily cut production by an additional 1 million barrels per day, which greatly alleviated the global oversupply problem and provided strong support to oil prices. At the same time, since January, the number of new confirmed cases of COVID-19 in the world has continued to decline. The turning point of the epidemic has appeared, and the market’s expectations for global economic recovery have increased. Not only that, in order to stimulate the economy, central banks in various countries have adopted loose monetary policies, and inflation expectations have also begun to heat up. Under the influence of the above factors, international crude oil prices continue to rise, which is an important reason for the recent strength of chemicals including PTA. However, as international crude oil prices rise, the need for OPEC+ to reduce production to support oil prices has decreased. At the new round of OPEC+ ministerial meetings, it is more likely that Saudi Arabia will stop production cuts and other member countries will resume production.

At present, the cracking difference between naphtha and PX is at a normal high level of 300 US dollars/ton, and the PTA processing fee is at a low level of 330 yuan/ton. Under this circumstance, there is still room for PTA processing fees to recover upwards. However, considering the possibility of loosening in international crude oil prices, it is difficult for the cost side to provide sustained momentum for the rise in PTA prices.

Supply is expected to be temporarily tight

Due to low processing fees, in February, many domestic PTA manufacturers reduced the load of their devices and even started operations. After maintenance, the overall operating load dropped from 85.87% at the end of January to 81.93%. From March to April, it includes Hengli Petrochemical’s 3 sets of units with a total capacity of 7.2 million tons/year, Xinfengming’s 5 million tons/year unit, Honggang Petrochemical’s 1.5 million tons/year unit, and Reignwood Petrochemical’s 1.4 million tons/year unit. The device, Zhuhai BP’s 1.25 million tons/year device is planned to be overhauled. Throughout the second quarter, domestic production capacity of 16 million tons/year is expected to be overhauled.

In terms of new production capacity, the second phase of Honggang Petrochemical’s 2.5 million tons/year PTA unit has been postponed. The 3.3 million tons/year unit of Yisheng New Materials will be put into operation in the second quarter. Considering the delay in the commissioning of the new unit, Stable, new production capacity cannot make up for the production capacity loss caused by maintenance.

Correspondingly, in terms of demand, the Spring Festival holiday is over, the terminal weaving industry has recovered, and the operating load of polyester devices has increased accordingly. Its demand for raw material PTA has steadily increased, and the PTA market will see a phased supply. The tight situation will in turn support PTA prices.

Forecast of the market outlook

The sharp rise in PTA futures prices in February was mainly boosted by the cost side. At present, international oil prices are at a high level, OPEC+ is likely to resume production, and the sustainability of the rise in oil prices is questionable. It is difficult for the cost side to continue to provide momentum for PTA price increases. However, in the second quarter, domestic PTA equipment was intensively overhauled, and downstream polyester demand recovered steadily. The improvement in the supply and demand pattern is expected to inject new power into the rise in PTA prices. Therefore, we are cautiously bullish on PTA prices and recommend reducing long positions in the early stage. </p

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Author: clsrich

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