PTA began to rebound after hitting a periodic low in early November, and the rise accelerated in December. Ethylene glycol, which is also a polyester chain, also started to rise soon after, while the newly listed staple fibers kept up with the rise in December. What is the driving force behind the collective rise of polyester chains? What will be the supply and demand situation of the three next year?
Reporter: Since mid-November, the three types of polyester chains—PTA, ethylene glycol, and staple fiber—have maintained a relatively stable upward trend. Even during this period, the main players moved their positions to far away months. But the rising pattern has not yet been destroyed. What are the driving forces behind it?
Founder mid-term futures energy researcher Zhai Qidi: First, rising oil and coal prices are driving costs. Since mid-November, the price of Brent crude oil has risen from US$43/barrel to the current US$51/barrel; recently, coal contract negotiation prices have also increased.
Second, driven by expectations of recovery in forward demand. Since it is a far-month contract, the market currently has high hopes for vaccine research and development. With the gradual recovery of the economy, terminal textile and apparel demand is expected to recover next year.
Third, driven by factors related to the product itself. PTA’s current spot inventory is relatively tight. The import volume of ethylene glycol in December was small and has been destocked recently. Short fiber futures traders are following up with downstream industries for replenishment, and short fiber factory inventories remain low.
Pang Chunyan, senior analyst at SDIC Essence Futures: First of all, as the source of raw materials for chemical products, crude oil prices have continued to rise since November, which has led to an increase in the cost of chemical products; in addition, The market is generally optimistic about the macroeconomic situation in 2021, so it is expected that the center of gravity of commodity prices will continue to rise from the low level; compared with other chemical products, the growth rate of polyester products is relatively low, there are factors to make up for the increase, and some factors are due to speculative funds buying at low prices; basically In terms of external factors, the rise in acetic acid prices has led to an increase in PTA processing costs, while the price of ethylene glycol has been firm due to the continued decline in port inventories, and the rise in raw materials has driven up the cost focus of short fiber.
Li Weiming from the Energy and Chemical Group of Guangzhou Futures Research Institute: The rise from mid-November to the present is first of all related to the cost side. International oil prices bottomed out at the end of October and early November, and the new coronavirus vaccine After its release, the market’s expectations for global economic recovery have increased, and the upward trend in international oil prices has provided significant support to the cost side of chemical products. PTA has a low valuation and is easily affected by the cost side. In early November, the price bottomed out and rebounded. Due to the high social inventory level of ethylene glycol, as inventory depletion began to accelerate in mid-November, ethylene glycol futures prices bottomed out and rebounded. The prices of thermal coal, methanol, and crude oil rose rapidly, which significantly compressed the profit levels of various ethylene glycol processes. , also boosting the price of ethylene glycol. The price of short fiber futures fluctuates greatly. This round of rebound also started in mid-November. The rebound of short fiber futures is more affected by terminal replenishment. The absolute price is also lower than in previous years. The market has given a good outlook for the economic recovery next year. expectations, and enthusiasm for terminal stocking is high.
Reporter: How will the basis perform after the three parties switch to the 05-month contract, and what kind of signal will it send?
Founder mid-term futures energy researcher Zhai Qidi: After the month change, the PTA basis has strengthened, and spot shipments have been tight recently, but with the launch of new production capacity early next year, the basis or weaken again. The basis difference of ethylene glycol has weakened slightly. Imports are expected to rebound in January, and many domestic coal-based and oil-based ethylene glycol are expected to be put into production in the first half of next year. The pressure on the supply side is still high. The short fiber basis is weakening. It is currently the terminal seasonal off-season. The futures price has been boosted by costs and has increased significantly. However, the spot follow-up is insufficient. The basis may start to be repaired in the peak season next year.
Pang Chunyan, senior analyst at SDIC Essence Futures: PTA futures basis continues to strengthen, mainly due to the tight supply in the spot market, which seems to be consistent with the high inventory in the PTA spot market. It is contradictory, but a large amount of actual spot inventory is locked into futures warehouse receipts, so the available spot market has dropped significantly; the MEG basis has been weakening, mainly due to the low import volume since October, which has led to the continued decline of domestic MEG port inventory. It fell below the 1 million tons level last week, but judging from the latest port arrival forecast data, MEG imports have recovered significantly. Therefore, port inventories are expected to rebound in the later period, and spot prices are relatively weak. The short fiber market basis shows a weakening trend. It can be seen that the spot market performance is weak and the futures is relatively strong. This is mainly because futures prices follow the strength of raw materials. However, the spot price is affected by the seasonal weakening of the market and is weak in pushing up.
Li Weiming from the Energy and Chemical Group of Guangzhou Futures Research Institute: The PTA 1-5 spread has been relatively stable. The basis difference between spot and 05 contracts has increased slightly since November. The current number of PTA registered warehouse receipts Larger, some warehouse receipt pressure may be concentrated on the 05 contract. The current low processing fees are conducive to the rebound of futures prices, and the basis difference between spot and 05 contracts may still show a stable and rising pattern. The price difference between ethylene glycol 1 and 5 has dropped significantly since early December. The spot price and the 05 contract have also weakened slightly. On the margin, ethylene glycol may rebound as the price rebounds, and there is an expectation of a recovery in production. In addition, the pressure for production is high, and the premium pattern in the far month may be will deepen further. The negative basis difference between the spot staple fiber and the 05 contract is the highest. There is no short fiber contract close to the spot. The pricing of the 05 contract reflects the market’s good expectations for the forward demand for short fiber.
Reporter: What will be the supply and demand background of the three next year? What is the mid- to long-term performance of the 05 contract?What is the current impact?
Zhai Qidi, a researcher at Founder Mid-term Futures: The contradiction between PTA supply and demand is expected to further intensify next year, and social inventories will continue to accumulate; ethylene glycol may continue to be in surplus next year, and inventories in main ports will rebound again. To high levels; short fiber supply and demand are expected to be good, fundamentals are healthy, and factory inventory levels may continue. The absolute price of the 05 contract is greatly affected by the expectation of rising costs. Excessive supply and demand will drag down the growth of PTA and ethylene glycol and limit the room for growth; while healthy supply and demand will provide strong support for the rise of the short fiber futures price center, and at the same time, disk processing fees are also expected Stay high.
Pang Chunyan, senior analyst of SDIC Essence Futures: In 2021, PTA and MEG will continue to face the negative effects of a large number of new devices being put into production. It is expected that the pressure of high inventory will continue to rise, so the pressure of the two Profits will remain low, but prices may continue to follow crude oil’s rise. There is little pressure to increase the new production capacity of short fiber futures benchmark delivery products. Therefore, supply and demand maintain a tight balance. Short fiber will maintain a good profit state. When downstream orders improve, prices are likely to rise.
Li Weiming from the Energy and Chemical Group of Guangzhou Futures Research Institute: PTA and ethylene glycol will still have a relatively large production capacity growth rate next year. The nominal production capacity growth rates of PTA and ethylene glycol will be 21% respectively. and 57%, there is huge pressure to put ethylene glycol into production. In addition, part of the capacity release from ethylene glycol production units in the second half of this year will be realized this month. The nominal growth rate of new short fiber production capacity next year will be around 17%. In addition, the production capacity base is small, and the overall production volume is much smaller than that of PTA and ethylene glycol. Looking at the three varieties of the polyester sector, staple fiber undoubtedly has the best supply and demand structure. At the same time, the seasonal performance of polyester products is also relatively obvious. From a longer-term perspective, the cost boost brought by the global economic recovery and the rise in international oil prices may first be reflected on the raw material side. As polyester products usher in the traditional stocking season in March and April next year, polyester raw materials and costs The relative price changes are worthy of attention.
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