From the beginning of July to the present, the main contract of PTA2101 has oscillated around the moving average system in the range of 3700 points to 3850 points. Although the market has rebounded, the extent is limited. The main reason is that the slow recovery of the terminal market has restricted the rebound of prices, while the squeeze on upstream cost-side profits has also limited the room for decline. As a result, prices broke out of a month-long sideways oscillation trend.
The slow recovery of the terminal market has restricted the room for price rebound. In the first half of the year, textile and clothing exports continued to show a trend of polarization. As of July, the export value of textile yarns, fabrics and their products reached 113,257.78 million yuan, a year-on-year increase of 54.5%; clothing and clothing accessories reached 108,591.71 million yuan, a year-on-year decrease of 2.8%.
The textile market is mainly driven by anti-epidemic materials and has shown an overall upward trend, while the clothing market has encountered a cold wave and transactions in the domestic and external markets have been weak. Although the domestic epidemic has been well controlled, the recovery of the domestic demand market has been slow and the overall market transactions have deviated, causing some companies to stop operations or reduce their workloads. In foreign markets, due to the recurrence of epidemics in some areas, exports have been blocked, and export sales have switched to domestic sales to seize market share. The overall market recovery pace is relatively lagging, and the polyester industry is mostly in a situation of “not prosperous in the peak season and very weak in the off-season.” As of July, the current retail value of clothing products reached 61.72 billion yuan, down 15.66% month-on-month and 4.2% year-on-year.
It is the peak purchasing season for autumn and winter fabrics. Domestic and overseas orders have rebounded to varying degrees, and the weaving load has increased slightly, but there has not been a substantial reversal. The main reason is that the current downstream profits of polyester are low. In addition, downstream customers of weaving pay more in batches, which has intensified the financial pressure on enterprises. Some factories were dragged down by the shortage of funds in the first half of the year and were relatively cautious in accepting orders, resulting in a continuous increase in inventory. .
At present, the inventory of water-jet and air-jet gray fabrics in Jiangsu and Zhejiang is still around 45 days. It is normal for some manufacturers to have inventories of more than 2 months. As time goes by, there is still a risk that inventories will continue to rise. Therefore, the downstream power for the PTA market rebound is slightly insufficient, which restricts the price rebound space.
The squeeze on PX profits also limits the room for price downward adjustments. As of August 25, the closing price of Asia PX Platts reached 553.67 US dollars/ton CFR China and 535.67 US dollars/ton FOB South Korea. Calculated based on yesterday’s Platts closing price and 500 yuan/ton processing fee, the cost price of PTA reached 3417 Yuan/ton, there is room for a fall of 300 yuan from the current disk price of the 01 main contract. According to yesterday’s naphtha price of 415.25 US dollars/ton CFR Japan, it is not difficult to see that the current cracking price of PX has reached 138.42 US dollars/ton, which is at a relatively low level in history. It has deviated from the normal average range of 350 US dollars, and even reached an extremely low level. Location, the profit margins for further compression are limited, and the cost support for PTA is strong.
As we enter August, PTA social inventory continues to decline, once again setting up a barrier to price decline. As of the end of July, the domestic PTA inventory was as high as 3.6373 million tons, but fell to 3.5631 million tons on August 20, a decrease of 2.04 percentage points. Boosting market sentiment restricted the room for decline.
This week, Shanghai Yadong’s 750,000-ton/year unit was temporarily suspended for 3 days, the petrochemical 1.4-million-ton unit dropped by 50% to early September, and Yisheng Ningbo’s 4# 2.2-million-ton unit is scheduled to open on September 1 Maintenance will begin two weeks later, and the device operating rate will decline slightly by then, which is expected to be a positive support for the later period. However, considering that PTA registered warehouse receipts are about to be delivered, if fully released, it will have a certain impact on the spot market and once again restrict the rebound of futures prices.
Comprehensive consideration, we believe that short-term PTA is in a dilemma stage, mainly oscillating around the moving average system in a wide range.
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