Market Profile
Opinion Strategy
The main Brent crude oil contract rose slightly last week and is currently fluctuating around $45/barrel. PTA futures prices rebounded after falling last Monday. As of August 7, Zhengzhou Commodity Exchange’s main PTA contract TA009 closed at 3,676 yuan/ton, an increase of 76 yuan/ton from July 31, an increase of 2.11%. This Monday, the main PTA contract was changed from PTA2009 to PTA2101. As of the close of August 10, PTA2101 rose by 20 yuan/ton, an increase of 0.53%. In terms of EG, last week it fluctuated by 50 yuan/ton to 3776 yuan/ton, an increase of 1.34%.
In terms of PTA supply, last week Yangzi Petrochemical’s 600,000-ton production capacity began maintenance on August 6, which is expected to take 15 days; Taiwan Chemical Industry’s 1.2 million-ton unit was shut down for maintenance on August 2. It is expected to last for 2 weeks; Tongkun Jiaxing Petrochemical’s 2.2 million tons production capacity will be inspected on July 12 and restarted on August 3. The average startup load dropped by 2.32% to 85.76% last week. Since August, PTA equipment maintenance has increased significantly. In mid-August, Zhejiang Reignwood is expected to perform maintenance for two weeks. The decline in the industry’s operating load will provide some support for PTA processing fees. Last week, PTA processing fees returned to the 700 yuan/ton line. In the later period, Focus should be placed on full-time maintenance. At the same time, PTA continues to accumulate inventory, and social inventories have reached new highs. In terms of futures warehouse receipts, due to the upcoming centralized cancellation of warehouse receipts in September, the volume of PTA futures warehouse receipts continues to decrease. Overall, PTA inventory pressure is still huge, which is an obstacle. The main factor for its price correction. On the downstream side, polyester inventories declined slightly, with polyester staple fiber falling significantly, with inventory days decreasing by 2.02 days to 4.32 days. The polyester load decreased slightly by 1.24% to 89.86%.
In terms of ethylene glycol, the operating rate of coal-based MEG has once again dropped to a historically low level of 27.81%. In the short term, due to no increase in profits, companies are not willing to restart, and domestic production is at a low level. There is room for a sharp decline in the production of water products in the later period. Limited, supporting the market’s rise.
In general, the inventory pressure of polyester raw materials is still relatively high. In comparison, in the short term, there may be more room for MEG price rebound.
Main risk points
1. The progress of the epidemic has triggered a sharp decline in downstream demand, which will compress raw material profits upward.
2. OPEC+’s ineffective implementation of production cuts has triggered a further collapse of the center of gravity of crude oil prices.
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