Market Profile
Opinion Strategy So far, the overseas epidemic has not seen a clear turning point. While the domestic epidemic prevention level is gradually relaxed, epidemic prevention work is normalized, and the impact on the sentiment of the industrial chain is gradually weakening. The crude oil production reduction agreement came into effect in May, and oil prices rebounded during the week and then fluctuated. Recently, except for the shutdown of Ningbo Liwan’s 700,000-ton PTA device due to safety accidents before the holiday, no other devices have been shut down for maintenance. The overall production reduction is not large, and supply pressure remains. Pay close attention to whether the May maintenance plan of Ningbo Yisheng’s 2.2 million tons unit can be fulfilled.
The current PTA processing fee is at the level of 700 yuan/ton, the profit is acceptable, and the desire to reduce production is not strong. In terms of downstream demand, polyester plants were overhauled and restarted during the week. Deli’s 200,000-ton units and Shenghong’s 250,000-ton units were restarted, and Hengli’s 200,000-ton units were overhauled. The overall domestic polyester level maintained at 87%. During the week, downstream polyester yarns saw a slight increase in volume due to the hype on the epidemic prevention theme and the explosions in Jiangsu and Zhejiang, but the atmosphere for speculation and stocking soon dimmed. It is reported that downstream, driven by early speculation, has sufficient stocks, and can maintain normal production for a long time without purchasing in the short term. The industry as a whole is still in the inventory accumulation channel. At present, when demand is flat, high inventory is still the main obstacle to the current recovery of the market.
Strategic suggestions
Wait and see (for reference only)
Main risk points
1. The progress of the epidemic has triggered a sharp decline in downstream demand, which has compressed raw material profits upwards.
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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