From 2020 to 2022, the domestic PTA market is expected to have a production capacity of 30 million tons/year, with 8.4 million tons/year in 2020 alone. Supply is increasing, but terminal demand is poor, and the oversupply pattern has intensified. International crude oil prices have plummeted due to the impact of the epidemic, and cost collapse has also been negative for the PTA market. Under the combined effect of the above factors, PTA futures prices have hit record lows many times this year.
International oil prices have recently resumed their upward trend
Since September, the number of new COVID-19 cases in Western European countries has increased again, with Britain, France, Germany, and Spain The four countries have re-implemented the lockdown policy, and Italy, under pressure, has recently stated that it will launch a “soft lockdown” policy. This approach has helped control the epidemic, but it has had a negative impact on refined oil consumption, and international crude oil prices have weakened since October. However, the US company Pfizer recently announced that its vaccine is 90% effective, which has greatly improved the outlook for crude oil demand. International oil prices have resumed their upward trend, which is also the main reason for the recent rebound in PTA prices.
In addition to vaccines, the results of the U.S. election are clear, which has reduced market uncertainty. The Biden team is inclined to increase efforts to control the epidemic, which will also help alleviate the impact of the epidemic on the U.S. economy. Overall, the international crude oil market is moving forward under the game of weak reality and strong expectations. There is rebound momentum in the short term, but it is highly limited.
In terms of PX, boosted by the rise in international crude oil prices, PX prices also rose slightly. At present, the domestic PX device operating rate is 85.87%, and the Asian average operating rate is 75.93%. The device operation is basically stable. It should be noted that the recent cracking difference between PX and naphtha is around US$78/ton, which is at a low level. Based on the judgment of the rebound in crude oil prices, it can be concluded that PX prices will remain strong.
The current spot price of PTA is 3,125 yuan/ton, the cost is 3,300 yuan/ton, and the industry average loss is 175 yuan/ton. In addition, the average processing fee of PTA is 415 yuan/ton, which is also at an extremely low level. As long as costs do not collapse further, PTA has formed a price bottom.
Terminal demand will weaken seasonally
Affected by the epidemic, domestic textile and clothing production basically stagnated in the first half of the year, but this part of domestic demand has not disappeared , but postpones the release. At the same time, the epidemic in Southeast Asia and India was severe, and local textile production was restricted. These orders also returned to China, making the domestic terminal textile performance in the fourth quarter better than the same period in previous years. As of November 13, the operating rate of the domestic terminal weaving industry was 82%, an increase of 9 percentage points from the same period last year. Terminal weaving performed well, and the demand for polyester picked up, which also increased the market demand for PTA. However, as the Spring Festival approaches, seasonal weakening of end-use weaving is inevitable, and the demand-side support for PTA will gradually weaken.
Forecast of the market outlook
To sum up, the current domestic PTA processing costs are at a low level, and the industry as a whole is losing money. In the environment of rising international crude oil market, the cost The end has formed a certain support for the price of PTA, and its phased bottom has been formed. However, domestic production capacity is concentrated and terminal demand will weaken with the seasons. It is difficult to change the long-term downward trend of PTA prices. Therefore, in terms of operation, a long-short and long-short strategy can be adopted. </p
