Introduction: During the National Day holiday, the domestic PTA futures market is closed, the market negotiation atmosphere is light, and the price maintains the pre-holiday quotation. On the cost side, affected by the strength of crude oil, the price of raw material PX has risen sharply. However, the fundamentals of PTA have not improved significantly. The market price has been slightly volatile and has not moved up significantly.
Market Overview:
During the National Day holiday, industry insiders are basically on holiday and out of the market, so there is no significant fluctuation in domestic PTA market prices. Asian CFR prices are affected by domestic holidays, and prices remain stable. The previous level was at $430/ton. During the holiday period, both PTA and downstream polyester installations fluctuated within a narrow range, but supply and demand did not improve significantly, and inventory accumulation continued to be small.
Supply side:
During the holidays, the overall operation of domestic PTA equipment was relatively stable. Only Xinjiang Zhongtai entered a shutdown state on October 3 and is expected to undergo maintenance for 1-2 months. In addition, Zhuhai BP’s 1.25 million-ton unit resumed operation at the same time, so market supply fluctuated little. According to Longzhong statistics (20201002-1008), PTA output was 967,300 tons. Taken together, there are still expectations for equipment maintenance in the PTA market in the later period, but Xinfengming Phase 2 is about to be put into operation, and market supply is still at a high level. According to Longzhong statistics, PTA output in October was about 4.2 million tons.
Demand side:
In terms of polyester, only two sets of devices have joined the maintenance queue, and the remaining devices maintain high-load operation. Among them, Wankai’s 550,000-ton unit entered maintenance on October 5, and Saisheng’s 200,000-ton unit entered maintenance on October 7. According to Longzhong Information statistics (20201002-1008), the output is 1.0769 million tons. Affected by the strong rise in crude oil prices, polyester sales performed strongly in the three days before the end of the holiday. The prices of various polyester products increased to varying degrees, while terminal orders performed well, supporting the high level of polyester terminal loads and the maintenance of some enterprises. The plan has been further postponed. According to Longzhong statistics, polyester production in October was about 4.8 million tons.
Cost side:
Foreign economic stimulus policies and hurricanes affected manufacturers to shut down offshore drilling platforms. International crude oil performed strongly during the National Day, and crude oil prices fluctuated and climbed, supporting PX and naphtha. Oil prices have moved up, but the PX processing difference is still at a low level. As of October 8, the PX-N price difference was US$127.04/ton. The contradiction between PX supply and demand is still quite prominent, and the PX processing gap continues to be low and it is difficult to improve in the short term.
Forecast for the market outlook:
In the short term, the cost side is slightly improving, and the overall situation is still dominated by shocks; due to the boost on the demand side and the slight contraction on the supply side, short-term TA supply and demand are still Mainly balanced and slightly loose. In addition, TA is weaker than other products and is mostly used as a short-selling product. The financial situation is not conducive to TA’s rebound. Therefore, we believe that short-term TA will still be dominated by shocks, operating in the range of 3250-3450 yuan/ton. </p
