In the next few years, PTA production capacity will once again enter a period of rapid growth. Amid expectations of oversupply, PTA is one of the weakest performing varieties among chemicals. Affected by the recent sharp drop in international crude oil prices, there is a possibility that the cost side of PTA will collapse again. Yesterday, the main 2101 contract once fell to 3,196 yuan/ton, setting a new low since its listing.
The picture shows the price trend of PTA spot and futures (unit: yuan/ton)
Cost side Or it may collapse again
At present, PTA production companies have entered an overall state of loss, but the extent of the loss is limited (between 100 yuan/ton). Although there are few upstream PX maintenance devices, the current PTA processing fee is 500 yuan/ton, which is at an extremely low level. Therefore, as long as international crude oil prices do not fall further, the downside space for PTA will be relatively limited. However, the epidemic has broken out again in Europe and continues to worsen. Countries have restarted lockdowns. The decline in refined oil consumption may cause international crude oil prices to plummet again. From this point of view, there is a possibility of another collapse on the cost side, and low processing fees cannot support a rebound in PTA prices.
The market supply is relatively sufficient
Due to small losses and acceptable downstream orders, PTA companies have good production enthusiasm and there has been no large-scale maintenance. . As of November 6, the operating load of domestic PTA manufacturers was 81.21%, which was at normal levels. Recently, in addition to the long-term shutdown of domestic maintenance equipment, there are also Dalian Yisheng’s 3.75 million tons/year equipment that will be shut down in early November. It is expected to be shut down for two weeks, Sichuan Energy Investment’s 1 million tons unit, and Yadong Petrochemical’s 750,000 tons unit. The 350,000-ton unit of Yangzi Petrochemical also began to shut down in early November. However, Yizheng Chemical Fiber’s 650,000-ton unit has recently restarted, and Zhongtai Chemical’s unit will also restart. In terms of inventory, as of November 6, the inventory of domestic PTA manufacturers can last for 6.5 days, still maintaining a relatively high level. Overall, the domestic supply of PTA is stable and the market has sufficient supply.
Demand is expected to weaken
Affected by the delayed release of demand and the return of overseas orders, the domestic textile industry is currently performing well. As of November 6, the operating load of domestic polyester plants was 88.72%, and the operating load of the terminal weaving industry was 84.5%, up 0.47 percentage points and 9.5 percentage points respectively from the same period last year. In the short term, Zhejiang Wankai’s 550,000-ton bottle flake device that was inspected in the early stage will be restarted, and the start-up load of the polyester device has not changed much in the near future. In addition, the current inventory of downstream polyester filament and staple fibers continues to decline, which will force polyester companies to replenish their inventories and boost demand for PTA. In the long term, the start of the textile industry will drop sharply near the Spring Festival, and affected by the uncertainty of external factors, there is an expectation of a decline in overseas textile orders. Therefore, the overall consumption of PTA shows a trend of strong reality and weak expectation.
To sum up, the current supply and demand pattern of PTA is relatively stable, but due to the off-season of terminal textiles and the impact of the external environment, demand is expected to weaken. Although the industry as a whole is in losses and processing fees are at a low level, it is difficult to support PTA prices as the cost side may collapse again. The author believes that the PTA futures price will continue to find a bottom in the market outlook, and it is recommended to continue to hold early short orders. </p