Introduction: In July, with the smooth commissioning of the new device, PTA’s domestic production capacity continued to expand, adding to the already oversupply of PTA. Suppressed by high construction and high inventories, the PTA market is in a stalemate this month, and some manufacturers have introduced maintenance plans. Will the PTA market turn around in August?
From a cost perspective, international crude oil prices have fluctuated at high levels recently. Although crude oil price increases have been limited due to the continued spread of the epidemic and tensions between China and the United States, the early OPEC+ production reduction agreement and the economic stimulus plans of various countries have been effective, providing support for international crude oil prices. In addition, there is progress in the research and development of the new coronavirus vaccine, which to a certain extent has stimulated the strengthening of international crude oil prices. Crude oil has provided solid support to the PTA market, and the external market atmosphere has been relatively strong, which has also boosted the PTA market.
Data source: Jin Lianchuang
From a supply perspective, Luoyang Petrochemical’s 325,000-ton unit was shut down on July 27 For maintenance, Jiaxing Petrochemical has not restarted after shutting down on July 12. As of July 30, the PTA weekly operating rate was 83.75%, which remains at a high level. However, compared with the oversupply situation of PTA, the impact of the above-mentioned equipment shutdown and maintenance on the market is limited. The key point is whether the maintenance in August can be fulfilled by each manufacturer. In addition, Shanghai Yadong Petrochemical has also joined the army of maintenance in August and plans to stop for maintenance for about 3 days at the end of August. If the maintenance plan in August can be implemented normally, the operating rate is expected to be reduced. By then, PTA’s accumulated inventory pressure will be relieved, and a slight destocking situation may occur.
From the demand side, as of July 30, the comprehensive operating rate of polyester was 88.54%. Due to the return to normal operation of some parking devices in the early stage, the operating rate has rebounded. However, the weaving operation rate continues to decline. Under the influence of the epidemic and the traditional off-season, it is difficult for weaving orders to get out of the downturn. Weaving companies are not very motivated to produce, and inventories in various downstream links continue to accumulate.
Data source: Jinlianchuang
Taken together, the PTA market conditions in July can be described as dull, with few device changes. The pattern of PTA oversupply has not been reversed. In August, PTA supply-side maintenance is expected to increase. If the maintenance plan can be fulfilled as promised, the dull PTA market may turn around by then. </p
