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Last week, Brent crude oil narrowed around $44/barrel oscillation. The PTA2101 contract continued its downward trend, falling by 59 yuan/ton (1.20%) to 4,850 yuan/ton. The EG2101 contract gradually declined after touching 4,000 yuan/ton, falling 44 yuan/ton (-1.17%) to 3,724 yuan/ton last week. In terms of upstream PX, the fundamentals remained weak last week. Dongying Weilian’s new 1 million tons PX production capacity is expected to be commissioned. In addition, the pressure on the inventory side still exists, market participants are cautious in trading, and PX processing margins have declined again. It is expected that with the new downstream PTA Production capacity was gradually put into operation, and the overall supply and demand for PX only improved after November. In terms of PTA supply, some inspections were suspended last week and production capacity was increased to operate at full capacity. Although the suspension of inspections in August was relatively large, due to the slow rebound in downstream consumption, the digestion of PTA inventory was slow, and it is expected that the inventory will still accumulate slightly in August. Entering September, equipment maintenance has decreased compared to August, and the pressure on the supply side has increased again. As September approaches, PTA futures warehouse receipts are facing concentrated cancellation. Currently, the volume of futures warehouse receipts continues to decline, and further attention needs to be paid to the impact of their inflow into the spot market. From the perspective of demand, textile and apparel exports and domestic sales fell sharply from January to July compared with the same period last year. The growth rate of polyester production was also significantly lower than last year. The impact of the epidemic on the economy has not yet ended. The recovery of terminal demand is far lower than expected. The inventory of finished products downstream of the industrial chain accumulation. The average weekly start-up load of polyester terminals increased by 0.94% from the previous week, which provided certain support for PTA demand in the short term. In terms of MEG, the start-up load increased by 3.9% to 56.00% last week, of which the load of the coal-making equipment increased by 8.80% to 36.20%. At the same time, many sets of coal-making equipment that were shut down for inspection were delayed and restarted. The start-up of the coal-making equipment has been suppressed to an extremely low level. Position, there is limited room for further compression, but as prices rebound, there is a huge demand for the start-up of coal processing equipment. In the short term, MEG will continue to fluctuate at a low level in a wide range.
Main risk points
The progress of the epidemic has triggered a sharp decline in downstream demand, which has compressed raw material profits.
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