PTA supply is likely to increase slightly from September to October, while high polyester inventories limit the transmission of terminal demand recovery to further upstream. The PTA supply and demand pattern is not optimistic, and the weak futures price is difficult to change.
Concentrated resumption of production of maintenance equipment
Affected by the low price of PX and the continued appreciation of the RMB, PTA processing fees have shown a slight increase recently. As of now, the PTA processing fee is around 700 yuan/ton, which is at a normal level, and the overall production enthusiasm of the company is acceptable. It is understood that at present, Lidong and Luoyang Petrochemical have resumed production of PX, and William Chemical has put into production. The subsequent supply of PX will be further abundant, and the price will continue to run weakly. The collapse of the cost end may suppress the price of PTA.
In August, domestic PTA manufacturers underwent intensive maintenance, and the operating load once dropped to 83%, and market supply dropped slightly. However, the devices that were undergoing early maintenance began to resume production one after another from the end of August to the beginning of September. The number of domestic devices that resumed production from mid-to-late August to the beginning of September reached 10.45 million tons/year, which does not include the Fuhai Chuang 450 that returned to normal after the load reduction. 10,000 tons/year installation. According to statistics, Sichuan Energy Investment’s 1 million tons/year device is scheduled to be inspected for two weeks on September 10, Ningbo Yisheng’s 2.2 million tons/year device is planned to be inspected at the end of September, and Jiangyin Hanbang’s 2.2 million tons/year device is planned to be inspected. After one month of maintenance in September, Zhongtai Chemical’s 1.2 million tons/year device and Yizheng Chemical Fiber’s 650,000 tons/year device are scheduled to be overhauled in October. Considering that domestic PTA processing fees are acceptable and the peak consumption season of “Golden September and Silver October”, it is unlikely that there will be a large-scale increase in device maintenance plans in the future, which determines that domestic PTA supply will show a slight increase from September to October.
The demand recovery is limited
Affected by the resumption of production of early maintenance equipment, the operating load of domestic polyester manufacturers has recently increased from 88% to nearly 90% , demand has picked up slightly, but the downstream inventory of polyester is at a high level and continues to rise. As of September 3, the inventory of polyester filament FDY was 27 days, an increase of 19.5 days compared with the same period last year, an increase of 260%; the inventory of polyester filament DTY was 32.5 days, an increase of 14.5 days compared with the same period last year, an increase of 80.56% ; Polyester filament POY inventory is 27 days, an increase of 23 days compared with the same period last year, an increase of 575%; polyester staple fiber inventory is 8.12 days, an increase of 5.62 days compared with the same period last year, an increase of 224.8%. The large backlog of polyester inventory indicates that there is a problem with end consumption.
In fact, due to the impact of the epidemic, the average operating load of the domestic weaving industry from February to August was only 53.24%, compared with 70.08% in 2019. At present, the start-up of the domestic weaving industry has rebounded, and the start-up load is about 70%, which is 9 percentage points lower than the same period last year. At the same time, there are signs of a slight recovery in terminal orders. However, considering the negative impact of the epidemic on the domestic and foreign economies, it is difficult for residents to see significant growth in non-essential clothing consumption. In addition, considering the huge inventory of downstream polyester, it is difficult for polyester companies to purchase PTA from outside on a large scale, and the probability of consuming their own inventory is high. This will increase the inventory of PTA production companies without supporting downstream. The current domestic PTA inventory can meet the market demand for 7.5 days, which is close to the average level during the epidemic.
In addition, recently PTA warehouse receipts are approaching their validity period, but the volume of registered warehouse receipts in the market is significantly higher than the same period in previous years. This further reflects the oversupply in the market and also suppresses the near-month contracts. Limit price increases in far-month contracts.
To sum up, at present, the supply of PX is abundant, and there is a possibility of further downward price in the future, making it difficult for the cost side to form support for PTA. On the supply side, PTA units that were inspected in the early stage have resumed production one after another, and subsequent inspections are limited. On the demand side, although there are signs of recovery in end-use consumption as we enter the peak season, due to the epidemic, it is difficult for the weaving industry to see a significant increase in operations, and downstream polyester inventories are at high levels, making it difficult for the end-use recovery to be transmitted to PTA. Based on the above judgment, the author believes that it is difficult for PTA to change its weakness. If the price rebounds, it can take a short position. </p
