The macroeconomic atmosphere at home and abroad is good, which is conducive to the improvement of downstream demand for PTA.
Since March 2020, the European Central Bank, Bank of Japan, and Federal Reserve have expanded their balance sheets far beyond the scale during the 2008 financial crisis. At present, the monetary policy stance of European and American central banks is dovish. In addition, the policy combination of “constant fiscal expansion + sufficient monetary easing” in European and American countries has become increasingly prominent. If Europe and the United States further increase fiscal stimulus policies in the future, European and American central banks will also need to promote monetary easing policies to cooperate. Overall, the current loose guidance overseas is conducive to accelerating the pace of overall economic recovery. Domestic exports in October improved significantly, supported by the “demand effect” brought about by the economic recovery and the “substitution effect” of orders transferred to China.
The U.S. election has come to an end, and uncertainty has decreased again. As expected at the end of 2020, there are still expectations for increased fiscal stimulus in Europe and the United States, which will be conducive to economic recovery and in turn boost export demand. In the first half of 2021, the negative impact of the epidemic may still not be completely eliminated, and U.S. residents and corporate sectors still need fiscal policy support. The scale of the new round of U.S. fiscal policy is expected to be close to one trillion U.S. dollars, providing strong support for the rise of the commodity market.
Domestic consumption is expected to continue to rebound, which will help improve downstream demand for PTA. The domestic economy continues to recover, residents/business incomes rebound, and endogenous demand dominated by consumption will gradually replace investment as the main driving force for economic growth. In October, social retail sales increased by 4.3% year-on-year, a growth rate that was 1 percentage point higher than that in September, and maintained positive growth for three consecutive months. At the same time, the per capita disposable income of urban residents continued to rebound in the third quarter, and domestic consumer demand showed an accelerated upward trend, which is conducive to the improvement of downstream demand for PTA. However, the current domestic epidemic situation in Hebei requires focus.
Crude oil has sufficient upward momentum and strong cost support.
OPEC+ production cuts, vaccine advancement in Europe and the United States, and the low dollar have all provided support for the rise in the crude oil market. Since the beginning of November, the price of Brent crude oil has risen from US$36.97 per barrel to US$56.58 on December 12. / barrel, an increase of 53.04%, and WTI exceeded 50 US dollars / barrel for the first time in 10 months. Currently, there are short-term incremental negative effects on the crude oil market caused by increased production in Iraq and Venezuela. However, the main source of incremental supply from these two countries is China. With China’s consumption recovering well, the overall actual disruption to the market will be relatively small. In addition, heavy purchases by Indian and Chinese refineries have also boosted crude oil prices in Russia, the Middle East, Latin America and the United States. The demand for the current heating season has not yet ended, and the demand for ship fuel remains stable, which provides sufficient support for crude oil prices. In the long term, as OPEC+ slows down its production increase and COVID-19 vaccines are gradually put into the market, crude oil has sufficient upward momentum to support the prices of downstream energy and chemical products, and the current price of PTA has received support.
The short-term supply and demand mismatch of PTA, and the tight spot supply situation has not yet been alleviated.
As the PTA futures spot market reached a new record low in mid-November, market bargain-hunting funds are eager to take advantage of the benefits of crude oil. In the spot market, some manufacturers have oversold in the early stage, the delivery is tight, the delivery warehouse is expanding, and traders have weak basis. The strong willingness to place registered warehouse receipts resulted in tight supply of circulating goods, which strongly boosted the upward momentum of bull funds. Although there were adjustments during the period, the pressure on downstream polyester inventories was small and the macroeconomic favorable conditions helped, so the adjustment efforts were limited. During the New Year’s Day, macroeconomic conditions were favorable, and polyester prices rose less but were more stable. On the first day after the holiday, the tight supply situation of some major manufacturers has not yet eased. Hanbang’s parking will lead to another tight supply of goods in some areas, and supply will continue to flow into the reservoir area in the short term. , the circulation of spot goods has become increasingly tight, mismatching supply and demand, PTA futures prices have risen sharply, driving production and sales to improve at midday, and the industrial chain is booming. At present, PTA maintenance and construction are coexisting, and the tight spot supply situation has not been effectively alleviated.
Polyester filament inventory began to fall from a high level in September. The inventory days of most downstream polyester products are at a low level. Some products are oversold for more than a month. Although PTA social inventory continues to increase, the supply of circulating goods is relatively low. The tight impact, while the demand for downstream polyester is relatively stable, coupled with traders’ strong willingness to register warehouse receipts, alleviates the inventory pressure on PTA factories to a certain extent. As of January 12, PTA social inventory continued to rise to 4.0145 million tons. In the later period, with the rising market sentiment and the arrival of the traditional peak season, polyester filament yarn is likely to gradually enter the active inventory replenishment stage in March, and a large number of warehouse receipts can continue to be resold, thereby easing the pressure on PTA circulating spot goods in the short term.
The competitiveness of domestic enterprises has increased, and export growth has eased the pressure on accumulated reserves. It is reported that domestic PTA exports have been good since October 2020, supported by the maintenance of India’s PTA equipment and good demand for downstream polyester. The export volume of PTA in October was 97,200 tons. The export volume of PTA in November was 98,700 tons. The cumulative export volume It was 707,074.38 tons. The export volume increased by 23.49% month-on-month, the export volume increased by 136.75% year-on-year, and the cumulative export volume increased by 12.02% compared with the same period last year. At present, domestic tourism manufacturers’ PTA exports from December to January are still good, which will be alleviated to a certain extent. At present, PTA social inventory continues to increase pressure.
To sum up, macroeconomic conditions are favorable, and crude oil and bulk commodities have sufficient upward momentum. Before any new negative effects on supply and demand appear, the PTA futures market may have continued upward momentum.
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