Crude oil at US$20/barrel, which is rare in history, really appeared in 2020. Superimposed on the impact of the short-term economic shutdown caused by the incident, commodity prices fell across the board. After the move, the prices of some varieties fell to historical lows. What’s more, the price of PTA fell to a new historical low since its listing.
Crude oil production reduction was less than expected and the benefits of production reduction have been released. The epidemic continued to suppress the demand for crude oil. On April 15, WTI crude oil fell back to the $20/barrel mark during the session.
The price of WTI crude oil at US$20/barrel is the psychological support level of some market participants. Some long-term bottom-hunting funds in the domestic chemical market believe that WIT crude oil will rebound from US$20/barrel to 30-30 in the future. The probability of a price of US$40/barrel or even higher is much greater than the probability of falling from US$20/barrel to US$10/barrel.
However, with full rationality and backbone of reality, although the PTA market resists the decline, there is no real benefit in the supply and demand side of PTA. PTA, whose social inventory has reached a record high, has maintained high operating costs and high processing fees. Apart from long-term funds buying bottoms and betting on future market rebounds, there is no other good news to explain this magical status quo.
High load: Under the trend of high profits, the start-up load has increased significantly. As of this week, the PTA load has climbed to 90%, and the PTA factory has made a collective profit. Under the premise, the operating load will continue to be high.
Affected by the incident, global demand shrank significantly, and crude oil fell to US$20/barrel, which severely hit the cost side of PTA. Especially since April, the processing range has continued to expand. In addition, as more The centralized maintenance of one set of equipment has been completed, and the overall load of domestic PTA has increased significantly by about 10 basis points. As of April 14, the overall domestic load is at 90.46%. According to statistics, domestic major manufacturers have fewer maintenance plans in the short term, and it is expected to remain the same in May-June. High operating status.
High profits: The current processing fee is as high as around 750. Under the background of high profits, most PTA companies Maintain normal operating load.
High inventory: Starting from the end of 2019, As the seasonal demand for downstream polyester weakens, while the PTA load remains high, PTA social inventory begins to enter the accumulation process. After the holidays, as domestic and foreign events spread, demand decreases again, and social inventory continues to increase. As of the time of writing, the domestic social inventory is 3.2381 million tons, the highest in the past six years, and the gap between supply and demand still remains above 10,000 tons of daily accumulated stocks. It is expected that social inventories will reach a new high in May and June. For example, based on the estimated operating load of 90% PTA and 80% polyester in late April, the theoretical surplus of PTA is 20,000 tons/day.
Beginning in the second half of 2019, a new round of PTA production cycle will begin again. In 2020, there will be 1,000 More than 10,000 tons of new production capacity has been added, but new downstream polyester production capacity has not been put into production, and the situation of oversupply is difficult to change. Recently, with the decline in costs, the PTA processing range has expanded to a relatively high level of nearly 800 yuan, which is slightly unreasonable for the current market. The market needs to suppress part of the processing range. When the industry starts to lose money for a period of time, some costs will be higher. The shutdown of factories will help the PTA market to stabilize and rebound.
The current operating load of downstream polyester is about 80%, but the operating load of terminal looms is only about 50%. In late April, especially polyester filament will accumulate inventory again, and there is a high probability of facing Demand is even bleaker than in March. The speculative bargain-hunting replenishment market in early April helped polyester factories move inventory smoothly, but it also overdrafted market demand in mid-to-late April.
As the epidemic continues to spread overseas, it is expected that my country’s textile and apparel exports will face greater resistance this month. In mid-April, the inventory of gray fabrics in Shengze was at a high of more than 42 days. In terms of orders and funds Under the pressure, the operating load of terminal looms continued to decline from late April to early May, and the negative impact of low demand in the industrial chain will suppress the market from the bottom up.
From the perspective of the mid- to long-term market outlook, it cannot be denied that funds hunting for the bottom of the industrial chain’s historically low prices have a great chance of winning. However, under the general environment of global economic recession caused by the short-term epidemic, everything from crude oil to end-use textile and apparel products have been greatly affected by the epidemic, and the market bottoming time may be far longer than industry expectations.
In the context of the global economic recession caused by the short-term epidemic, everything from crude oil to end-use textile and apparel products have been affected to varying degrees. Upstream PX and downstream polyester are unable to squeeze the supply of PTA. High processing fees. In late April, PTA maintained high processing fees, high production capacity, and high inventory. If the epidemic in Europe and the United States continues to intensify or crude oil fails to rebound significantly, the confidence of market bargaining funds will weaken, and the PTA market will sooner or later return to a bear market dominated by excess spot prices.
</p
