After being in the doldrums for nearly half a year, PTA has finally “avenged its shame” recently and launched a willful rise mode! PTA futures took the lead in taking the lead. The market surged rapidly on the 4th and continued the upward momentum on the 7th. As of the close of the 7th, the main PTA05 contract of Zhengzhou Commodity Exchange PTA futures closed at 3768 yuan/ton. Compared with the settlement price on the previous trading day, it increased significantly by 110 yuan/ton, or 3.01%.
Why is PTA going so high? The market even predicts that PTA’s rise may continue to surge forward, with expectations of climbing to the highest level this year!
The temptation of rising chemical raw materials
The dawn of the market is coming after all the bad news
The PTA industry’s “three highs” characteristics of overcapacity and high processing fees, high operating costs, and high inventory have become industry consensus. Under the unanimous pessimistic expectations of the market, PTA futures Become an empty standard. The commodity market bottomed out in April, and most chemical products have approached or exceeded their highs at the beginning of the year. Especially after November, due to the continuous recovery of the domestic economy, there have been rising prices of chemical raw materials. However, PTA has maintained a long-term low consolidation and oscillation state.
Since November, positive news about vaccine progress has been frequent, the market is relatively optimistic about demand recovery expectations next year, market risk appetite has increased, and international oil prices have rebounded in a V-shaped manner. Breakout upward. “OPEC+” reached a compromise production reduction agreement in early December, increasing production by 500,000 barrels per day in January 2021. “OPEC+” ministerial meetings will be held monthly to revise the production reduction agreement, with monthly adjustments not exceeding 500,000 barrels per day. , the period for compensating production cuts has been extended to the end of March 2021. Brent oil is currently approaching the 50 mark, and has risen by more than 20% from the low in early November.
Under the unanimous pessimistic expectations of the market, the rebound in crude oil prices has brought a glimmer of hope to the PTA market, and the market transaction logic has switched from supply and demand-led to cost-led. In addition, the PX units of CICC Petrochemical and Fuhaichuang have successively entered the maintenance process, and the start-up progress of Sinochem’s new PX unit in Quanzhou has not been as expected. The increase in PTA load has benefited the demand for PX, and the marginal improvement in PX supply and demand has also alleviated the pressure on the cost side of PTA.
Over 300,000, equivalent to 1.5 million tons of spot goods
PTA registered warehouse receipts hit a new high since listing
As international oil prices continue to rebound, PX supply and demand margins improve, PTA spot circulation supply gradually decreases, and the market transaction logic switches from the supply and demand side to cost-dominated. The absolute low price makes PTA futures favored by funds. The total trading volume and open interest of each contract hit a record high, and the volume and price of the main contracts rose upward.
The reality of excess supply and demand of PTA has led to a positive structure in the PTA market. The performance of PTA spot and front-month contracts is weak, and the far-month contract continues to be at premium. The basis difference can cover the risk-free arbitrage cost. , futures warehouse receipts continued to rise rapidly after being re-registered in September. The PTA processing fee is currently about 500 yuan/ton, which is relatively low, and the downward space is not very large. And as PX recovers upward, the PTA processing difference is more obviously compressed. Overall, there is a safety margin for going long in PTA processing fees. The PTA warehouse receipt cancellation period is in September. The current price difference between 1 and 5 is about -130 yuan/ton, which meets the risk-free arbitrage spread. After receiving the goods, the bulls can sell the May and September contracts. This is also one of the safety margins for the bulls to go long. one.
Currently, due to the limitation of delivery warehouse capacity, the number of warehouse receipts is limited without expansion. Even if the social inventory is high, the number of deliverable warehouse receipts is limited, then The long-term market receives warehouse receipts, eliminating the need to find a delivery warehouse. At the same time, for the industry, spot pressure is relieved, and processing profits can be locked in through the market. As of December 7, PTA’s registered warehouse receipts plus valid forecasts have exceeded 300,000, equivalent to 1.5 million tons of spot goods, setting a new high since its listing. A large amount of supply is consolidated in the delivery warehouse, resulting in a reduction in the supply of goods circulating in the spot market.
The absolute price of PTA is approaching historical lows. Coupled with the rebound of crude oil and the phased tightening of PTA spot supply, the capital game has intensified, and the amount of funds deposited in PTA futures is increasing. The total trading volume of each PTA contract reached 4.736 million lots on December 4, and the total open interest reached 3.854 million lots on December 7, both setting new highs since listing. As futures registered warehouse receipts rise rapidly, PTA delivery storage capacity is tense. The PTA2101 contract and the main 2105 contract have both increased by more than 3% for two consecutive trading days. The main contract has increased both in volume and price. In the past three trading days, positions have soared by 714,000 lots.
Social inventories are high and downstream demand has become a key point
After the PTA industry cleared its production capacity from 2015 to 2016, This year has once again entered the peak period of production expansion. This year, domestic PTA production capacity is planned to increase by 10.9 million tons/year, and the production capacity growth rate will reach 20.8%. By the end of this year, the total production capacity of PTA will reach 63.33 million tons/year, exceeding the total production capacity of polyester, forming an absolute surplus.
The domestic PX industry has taken the lead in expanding since last year, and supply has tended to be loose or even excessive, leading to a redistribution of profits in the industry chain, with the PX link giving profits to the PTA link. This year, the average processing difference of PTA disks has remained at around 680 yuan/ton, and most mainstream devices can maintain good profits. Driven by high profits, PTA companies are actively producing, and output has hit a new high in recent years.
However, when PTA is in a large production cycle, the production capacity base is relatively high, and the processing fee is acceptable, the PTA device inspectionThere are less repairs, the PTA load is high, and the output is at a high level. Due to the impact of public health events, PTA demand performance is average and lacks bright spots, resulting in high PTA social inventory. As of the end of November, PTA social inventory reached about 3.9 million tons, an increase of about 2.7 million tons compared with the same period last year, and a large increase.
At present, PTA’s operating load has increased to more than 90%. Fujian Baihong’s 2.5 million tons/year new device is scheduled to be commissioned in December. However, after the peak seasons of the Gold, Nine and Silver Ten, the downstream demand gradually weakened, and in December There are expectations for terminals to weaken after the month, mainly due to poor orders and workers taking off early for holidays near the Spring Festival. At the same time, some polyester factories plan to undergo maintenance at the end of December, and demand is expected to decline further. PTA will accelerate inventory accumulation before the end of the year, and PTA processing There is room for compression.
Taken together, vaccine benefits are frequent, the market is relatively optimistic about demand recovery expectations next year, the “OPEC+” production reduction support policy continues, the center of gravity of international oil prices gradually rises, and PTA cost support be strengthened. The rapid rise in PTA futures warehouse receipts has led to tight delivery storage capacity and reduced spot supply. It is expected that short-term PTA futures prices will remain strong. In the medium term, as oil prices rebound, conflicts in the OPEC alliance will gradually intensify, and U.S. shale oil will gradually return, and oil price trends are still likely to fluctuate. PTA is still in a production expansion cycle, and a large amount of new production capacity limits the room for PTA futures price rebound. </p
