Introduction: The Spring Festival holiday has just passed, and the domestic PTA market has reached a climax after the holiday, with prices constantly refreshing. As of February 23, the PTA futures price has reached the daily limit of 4,594 yuan/ton, an increase of 10.89% from the closing price before the holiday. The reason for PTA’s current rise is inseparable from the contribution of crude oil at the raw material end and PX, the direct upstream raw material. In addition, the cost and supply and demand sides have been improving, laying a good foundation for the strong rise of the PTA market. The positive market support continued after the holiday.
Strong crude oil provides assistance and cost support
Comparison chart of PTA price trend in East China market:
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Data source: Longzhong Information
International crude oil performance from the Spring Festival to the present Perfect, crude oil production has recovered slowly after the recent cold wave weather, and the forecast of rising oil prices has boosted market sentiment. In addition, industry players are generally bullish on commodities, and international oil prices have rebounded strongly. The Brent 04 contract rose $2.33 to $65.24 per barrel. With the help of crude oil, the price difference between PX and naphtha recovered rapidly. After 9 months, and in the context of destocking, the PX processing fee exceeded US$210/ton in February. It is expected that PX will continue to de-warehouse the pattern in the later period, and processing fees will remain high. PTA processing fees show a compression trend and currently remain at around 310 yuan/ton.
Supply maintenance boosts, fundamentals are in demand
Recent PTA device maintenance and expected developments:
Data source: Longzhong Information
After returning from the Spring Festival holiday, the PTA market fluctuated and climbed. On the supply side, Hainan Yisheng’s 2 million tons and Shanghai Petrochemical’s 400,000 tons units have entered maintenance. The supply has narrowed slightly. Recently, due to the rapid rise in PTA market prices, spot liquidity has weakened, and the production capacity of the equipment to be overhauled is expected to reach more than 16 million tons from March to April. In addition, there is a slight delay in the commissioning of the new 2.5 million tons capacity of the second phase of Honggang Petrochemical. The positive short-term supply side boosts market confidence. As of February 23, the spot price of PTA was 4,295 yuan/ton, an increase of 9%.
The demand side is gradually recovering, and industry players are optimistic
The price of downstream products has increased:
Data source: Longzhong Information
The PTA market price has increased strongly, and the downstream polyester resumption time has been earlier than in previous years. The current polyester load It has reached 87.69%. From the end of February to the beginning of March, the equipment load of downstream weaving factories slowly increased and gradually resumed normal production. The prices of major polyester products also increased to varying degrees due to the increase in raw materials. Moreover, there is not much pressure on downstream polyester inventories, and the polyester load is expected to be around 90% in March. The coordination of cost and demand sides supports the rise of PTA spot prices.
Editor’s point of view: The cost side of PTA’s increase this time has been strongly driven. At the same time, PTA processing fees have narrowed to a low level, and multiple factors resonate. It is expected that the PTA market will be strong in the short term, but considering the high social inventory of PTA and the large amount of new production capacity, the supply will still restrict the upward space of current prices. </p
