PTA has entered a new production expansion cycle in 2020. A large number of PTA units that were completed after the private large-scale refining and chemical equipment was put into production last year are waiting to be put into operation. However, the sudden new crown epidemic disrupted The rhythm of the market, the crude oil “black swan” incident at the end of the first quarter and the beginning of the second quarter put collective pressure on the chemical sector. The absolute price of PTA was hit to a record low, and due to the prominent supply and demand contradiction, the commodity market regarded it as an absolute short position. Prices were suppressed throughout the year, and only at the end of the year did trading valuations return to logic.
In terms of price, from January to December 2020, the average price of PTA was 3,606.71 yuan/ton, a decrease of about 2,143 yuan/ton from 5,749.86 last year, a decrease of up to 37%; the average import price was The price was US$468.2/ton, down by about US$277.1/ton from US$745.3 last year, a decrease of about 37%.
The internal high was 4,975 yuan/ton at the beginning of the year, and the low was 2,945 yuan/ton on the second day of negative crude oil prices in late April; the external high was also at $635/ton at the beginning of the year. tons, the low is the same as the internal market, around $390/ton. The range of high and low price differences between internal and external markets is around 65%.
Looking specifically at quarterly trends:
First quarter: Under the influence of the epidemic, the world fell into panic
Before the Spring Festival, affected by Affected by the conflict between the United States and Iran, crude oil and gold continue to perform roller coaster prices. The PTA market shows severe volatility. However, due to the expectation of inventory accumulation, the pressure at the 5100 point is particularly obvious. The overall performance of the spot basis is weak. The offer price is 90-100 yuan/ton at a discount based on the 05 contract, and the negotiated deal discount is 100-120 yuan/ton. The market is dominated by forward February cargo transactions. Later, the market entered the Spring Festival mode, and with the decrease in trading volume, the PTA basis strengthened slightly.
During the Spring Festival, the outbreak of the new coronavirus pneumonia began to gradually trigger a domino effect, and PTA entered a continuous plummeting channel.
On February 3, the futures market gapped and closed on the first day after the holiday. On the second day, it opened low to 4236 and then rebounded moderately. However, due to the slow resumption of work in the country, the PTA inventory accumulation was expected to be serious. Originally expected The social inventory that can only be accumulated by May this year is expected to be cashed in early in March, and the market is highly pessimistic.
Around February 12, the PTA futures market gradually opened the risk-free hedging window. A mainstream supplier sold a large amount of March-May at a discount of 140-150 yuan/ton on the basis of the 05 contract. For forward futures for delivery, the single-day market trading volume on the 12th was around 60,000 tons, and the single-day trading volume on the 13th continued to exceed 20,000 tons.
Starting from the 20th, the number of countries infected by the global epidemic and the number of infections continued to rise, and the global risk index intensified. The world experienced a black week in the last week of February. Stock markets in many countries panicked and sold. Affected by this, the fundamentals themselves are under pressure. The large PTA has been hit by funds since the 26th, and futures directly hit the bottom for the second time.
On March 6, a black swan event broke out at the OPEC meeting. Not only did it fail to meet market expectations of an additional 1 million to 1.5 million barrels of daily production reduction, Russia’s “abandonment of talks” caused Saudi Arabia to “break the pot and break the pot.” After announcing on March 7 that it would not cut production but instead increase production in April, crude oil prices fell by more than 30% at the end of that week, and PTA began to follow the decline.
Afterwards, due to the large-scale country closure measures in Europe and the United States, the return rate of autumn and winter orders in Europe and the United States increased day by day. The downstream intention to reduce production in April increased, and the expectations of polyester to follow the production reduction also increased.
Thus, by the end of March, the price of the 05 contract reached as low as 3118 points. In early April, the supply discount for the 05 contract was 70-75 yuan/ton, and the offer discount was 75-80 yuan/ton; In late April, the offer discount was 55 yuan/ton, and the delivery discount was 65 yuan/ton. The US dollar price trend was the same. By the end of March, PTA’s one-day external offer price fell to US$400/ton.
In the second quarter, PTA hit a new low and slowly recovered
During the Qingming Festival, the United States said that Saudi Arabia and Russia would significantly reduce crude oil production, and Saudi Arabia called for an OPEC+ emergency At the meeting, the market’s hope for joint production cuts was rekindled. Within a few days of the holiday, PTA trading volume increased significantly, with the two major suppliers’ cumulative trading volume exceeding 400,000 tons. Finally, OPEC+ confirmed that it will carry out the first round of production cuts for two months from May 1, 2020, with a production reduction of 9.7 million barrels per day; from July 2020, it will reduce production by 8 million barrels per day until December; from 2021 Production will be reduced by 6 million barrels per day starting in January until April 2022.
However, storage fees in the crude oil market may rise sharply due to insufficient storage capacity, triggering an increase in the selling sentiment of spot goods in recent months, and oil prices in recent months have bottomed out again; on the 21st, the last delivery day of the WTI futures 05 contract , suffered a frantic sell-off and fell into negative territory for the first time in history. Affected by this, PTA futures fell to a new low the next day, and the spot price fell below 3,000 yuan/ton.
However, after the negative price, crude oil prices began to rebound. At the same time, under the two waves of “hype” in May, including inquiries about resumption of work in Europe and the United States and superimposed demand for epidemic prevention themes, polyester filament produced two pulses of production and sales in May. PTA’s current basis has strengthened significantly. After that, three sets of equipment including Hanbon suddenly stopped production. As a solid chemical product, the speculative demand for PTA also played a strong bottom support role, further intensifying its resilience.
In June, PTA continued to have strong resilience amid the steady rise in crude oil and warm macroeconomic trading sentiment; but on the other hand, the Hanbang unit is about to restart, and Hengli’s new unit is expected to be put into production, which puts supply pressure As a result, its rebound space is weaker than that of other chemicals, and it has maintained a volatile trend within the range of 3500-3800 yuan/ton on the futures market throughout the month. The overall performance of the U.S. dollar market was the same as the domestic market. By the end of June, cargo negotiations had rebounded to 420-430 U.S. dollars/.��nearby. Third quarter: Macro accidents occurred frequently, and PTA once again staged a roller coaster market.
Third quarter: Under the short-selling pattern, PTA’s performance was unsatisfactory
Throughout the third quarter, the commodity market showed positive signs such as resumption of work and production, inflation expectations, etc. Under the support, it fluctuated and rose. Some varieties performed strongly and continued to increase positions. Therefore, the fundamentals are relatively transparent. The oversupply situation during the year is difficult to change. PTA is undoubtedly regarded as a short position in the entire commodity sector. It is difficult for the absolute price of PTA to climb, and it is always in a state of oscillation in a narrow range.
In the first half of July, the quoted discount for spot main port supply for contract 09 was 75-80 yuan/ton. In the second half of July, the discount for supply for spot main port supply for contract 09 was gradually strengthened to 45-50 yuan/ton for contract 09, with a transaction discount of 45-50 yuan/ton. Around 40 yuan/ton; the supply negotiation discount in mid-August is around 35-40 yuan/ton. The US dollar bonded one-day tour offer basically remains between US$450-460/ton, and cargo negotiations are basically around US$415-430/ton.
After mid-August, due to the concentrated cancellation of September contract warehouse receipts, the spot market, which is burdened with high inventory pressure, has shown its due weakness. The basis has continued to weaken, and suppliers have actively sold forwards. , to the second half of the month, the supply discount for 01 contracts in early September was 190 yuan/ton, and the delivery discount was 195 yuan/ton; in mid-September, the offer discount was 175 yuan/ton, and the delivery discount was 185 yuan/ton. The absolute price of the US dollar is still fluctuating between US$440-460/ton.
In mid-to-late September, the increase in new coronavirus infection cases in Europe suppressed market sentiment. The strong performance of the U.S. dollar and the resumption of polyester production cuts put pressure on polyester raw materials, and the center of gravity began to weaken significantly again. By the end of the month, PTA spot prices were quoted at a discount of 190 yuan/ton for the 01 contract, and delivery discounts were around 195 yuan/ton; some used goods were traded at a discount of around 210 yuan/ton, and supply sources in mid-October were quoted at a discount of 170-175 yuan/ton. tons, the overall trading atmosphere was extremely light. The U.S. dollar price has returned to July levels again.
Fourth quarter: Trading reality VS trading expectations, PTA long-short game
As mentioned above, the continued upward trend of commodities started in the late second quarter In the process, PTA, a chemical product known as “small crude oil” and “small macro” in previous years, basically ranked at the bottom. Therefore, there is no shortage of funds in the market that are always ready to move and want to trade the concept of returning its value. The long-short game was obvious in the fourth quarter.
During the National Day, due to the large influx of orders for some home textiles and autumn and winter clothing, downstream production operations increased significantly, and the overall market sentiment for polyester recovered rapidly after the holiday. In the first week after the holiday, PTA futures rose by about 200 points, and the mood set off the first small wave. However, starting from the middle of the month, downstream companies no longer chased the price of polyester finished products, and production and sales weakened significantly. Coupled with Dushan Energy’s new equipment Due to the expected impact of the commissioning of production and the restart of several sets of maintenance equipment, the spot basis began to collapse. Before the end of the month, the spot discount for the 01 contract weakened to around 190-200 yuan/ton. The collapse of the basis also caused futures prices to begin to fall for days. Coupled with the drop in crude oil prices caused by the worsening of the epidemic in Europe and the United States near the end of the month, PTA futures in the second half of the month also regained all the gains in the first half.
In the November U.S. election, the commodity market fluctuated violently, and the overall strength was clearly divided. Since the polyester industry chain products have not yet released a clear signal of sustained demand, they were regarded as short positions, and the price of PTA was once suppressed. Near the lowest point of the year, the basis reached a discount of around 225 yuan/ton at its worst, and the discount for some used goods was close to 250 yuan/ton.
In the middle of the month, Biden’s vote was almost a foregone conclusion, the number of variables in the US election was reduced, and the vaccine developed by Pfizer of the United States had a 90% infection rate against COVID-19. Market risk sentiment was high, and global stock markets surged. At the same time, Saudi Arabia , Russia and other oil-producing countries expressed remarks about adjusting production cuts in the face of changes in the epidemic, international crude oil bottomed out, and PTA rebounded again, and was regarded by the chemical sector as a crude oil benchmark to increase its positions. The spot basis also repaired to a discount of around 135 yuan/ton. At the end of the month, the US dollar price also returned to around US$440-450/ton.
The commodity market was extremely hot in December. Before the second half of the year, the speculation of black products such as coal and iron ore drove the entire commodity to rise in resonance. In the chemical sector, the enthusiasm for pursuing the price of high-priced products gradually became cautious, but PTA, the benchmark of “solid crude oil”, is increasingly favored by funds, and its trading valuations have returned.
The ratio of virtual to actual positions in PTA futures once expanded to a state of 5:1, triggering a “financial squeeze” effect. The market ignores the fundamentals, and since the beginning of the month, futures prices have increased both in volume and price.
Until the second half of the year, commodity futures triggered a linear correction due to the year-end closing and withdrawal of some funds in the futures market, coupled with factors such as the worsening epidemic situation in Europe and the United States. The spot basis strengthened to a discount of around 195 yuan/ton to the 05 contract. Due to the increase in registered warehouse receipts, spot liquidity has declined. </p
