Recently, driven by the resumption of work in Europe and the United States, the terminal market has shown certain positive results. However, in the context of overseas epidemics that have not been effectively controlled, we still have doubts about whether downstream demand will continue to improve. At the same time, PTA social inventory continues to rise, and the market supply and demand are still severe, and the rebound space of PTA may be suppressed.
Costs are at low levels
In the past month, international oil prices have risen steadily, driven by Saudi Arabia’s unexpected production cuts and the resumption of work in many places in Europe and the United States. , more than US$30/barrel. However, the performance of PX, the direct raw material of PTA, is not satisfactory. Against the background of the rapid increase in domestic PX production by 58% last year, the loose supply of PX this year is particularly obvious. For PX, which is in a weak situation, the early decline in oil prices accelerated the decline of the PX market, while the rise in oil prices had a limited effect on PX prices. Since late April, PX’s cumulative increase has been only 15%.
As naphtha crack spreads recover,? The production profit of the PX link has narrowed, and the price difference between PX and naphtha has recently fallen back to around US$230/ton, which is US$40/ton lower than the same period in April. Despite the maintenance of some installations in Asia in May, the supply of PX is still sufficient. The current raw material cost of PTA is at a low level of around 2,600 yuan/ton, which has certain support for PTA prices.
Inventory pressure is huge
Although the absolute price of PTA is at a low level, the early decline in oil prices has benefited the PTA production process, and PTA processing fees have continued to rise from March to April. The recent growth rate of PX is far weaker than that of the upstream market, so PTA production profits still maintain a good level of 700-800 yuan/ton.
However, high processing fees are often accompanied by high operating rates. Since April, the average operating rate of PTA factories has been as high as 92%, making PTA’s high inventory pressure more obvious. As of now, PTA inventory has risen to a high of around 3.55 million tons. Calculated based on existing production capacity, the PTA operating rate must be nearly 10% lower than the polyester operating rate for the market to be basically balanced. However, compared with the current operating load of 91% in the PTA industry, the polyester operating rate is obviously insufficient. It is understood that Hainan Yisheng, Xinjiang Zhongtai and Yizheng Chemical Fiber have maintenance plans in the PTA market in June. However, due to high processing fees, the possibility of postponing maintenance cannot be ruled out. In addition, Hengli 5# unit is expected to be put into operation in late June, and the short-term PTA inventory accumulation situation is difficult to change.
Demand needs to recover
As the number of confirmed cases in many overseas countries declines, countries have begun to relax control, driving the operating rate of terminal weaving companies to rebound. However, the current inventory of gray fabrics is still at a high level of more than 40 days, and the transaction volume of China Textile City has not improved significantly. At the same time, facing the traditional off-season for textiles in summer, and with the overseas epidemic not being effectively controlled, there are still variables in foreign order demand. Based on the domestic situation, it is optimistically estimated that the resumption of work will last 1-2 months.
Currently, the various varieties of polyester are still differentiated. Except for staple fiber and bottle flakes, which are still profitable, the main product filament market is still not good. After two short rounds of production and sales peaks since May, polyester The ester market has once again entered a situation of accumulated inventory. Due to the uncertainty of terminal demand, downstream manufacturers are not willing to purchase, which affects the enthusiasm for increasing polyester production and is not conducive to the digestion of PTA inventory.
In short, after the improvement in terminal demand is expected to consume, more substantial orders must be expected, and the short-term high PTA inventory situation will continue. </p
