In late June, the implementation effect of the OPEC+ production reduction agreement was prominent. The international crude oil price has risen well recently, and the cost side has supported the PTA market. Stronger. However, with the expectation of the restart of equipment and the commissioning of new equipment, the supply and demand pattern of PTA will weaken, and the rise of PTA may be difficult to continue in the short term.
Cost-side support is solid
In terms of crude oil, the OPEC+ production reduction agreement continues to advance, the production reduction prospects are expected to deepen, and the global Control measures in response to the COVID-19 epidemic have been gradually relaxed, and the international crude oil market has generally shown a volatile upward trend, which has provided strong support to the PTA market. In terms of PX, the trend of naphtha is strong, and PX itself has expectations of lower operating rates. Recently, PX prices have experienced a large increase, and the cost side is still good for the PTA market.
Devices restarted, PTA supply increased
Recently, many manufacturers have restarted PTA devices, including Hanbang’s 2.2 million-ton unit and Shanghai Petrochemical’s 400,000-ton unit. Devices, the 350,000-ton unit of Yangzi Petrochemical, which has been shut down since the trial production of IPA in December 2019, also heated up and restarted on June 23. In addition, the new unit of Hengli Petrochemical is scheduled to be put into operation in late June. With the restart of the equipment, there will be an increase in the room for PTA operating rates to increase, and the PTA market supply is expected to increase. The short-term destocking in the early stage may be difficult to reproduce, and PTA is about to return to the accumulation channel. High inventories and expectations of increased supply have suppressed market prices to a certain extent and hindered PTA’s continued upward trajectory.
Data source: Jin Lianchuang
In the traditional off-season, terminal demand is not good
Recently, polyester production has been stable, and PTA has been purchased for rigid needs. The current weekly production opening remains at 89.11% . However, terminal weaving has entered the traditional off-season, and the impact of public health events has continued to export orders. Weaving inventories are high, and terminal demand is generally weak, with no substantial positive boost. Transmitted to the upstream of the industrial chain, PTA supply increased without significant improvement on the demand side, and the supply pattern showed a weakening trend.
Data source: Jin Lianchuang
Overall , the cost side’s support for the PTA market remains solid, and there is not much room for PTA to have a downward trend. In anticipation of the restart of equipment and the commissioning of new equipment, PTA supply is sufficient. However, downstream demand is flat, the willingness to purchase raw materials is not strong, and the PTA supply and demand pattern is weakening. It is difficult to reproduce the previous increase, and may remain volatile in the short term.
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