Market Profile
Opinion Strategy
Last week Saudi Arabia called on OPEC and non-OPEC countries to hold The emergency meeting attempted to resolve the oil price war. Boosted by the rebound in crude oil, PTA and ethylene glycol showed an oversold rebound trend. Currently, there is fierce competition among all parties around the topic of production cuts. OPEC+ previously proposed to hold an emergency meeting this week. In order to leave sufficient time for negotiations between all parties, the meeting was postponed to this Thursday. Since the interests of all parties are involved, and Trump Trump last Saturday The market is full of concerns about the outcome of the negotiations. Even if the production reduction agreement is reached, it is still uncertain how much impact the production reduction, which is a drop in the bucket, will have on the demand side that has fallen off a cliff. It is expected that the short-term rebound of crude oil prices will be limited, and we will pay close attention to the progress of negotiations in the later period.
At present, the overseas epidemic situation is becoming more and more severe, and we should be mentally prepared to normalize the fight against the epidemic. The intensification of the overseas epidemic has a huge impact on terminal consumption of the polyester industry chain. The PTA operating rate increased last week, with the weekly average operating rate rising to 83.8%, and once reaching 86.4% in the middle of the week, mainly due to the restart of early maintenance equipment. Specifically, a 1.4 million tons/year production capacity device in Zhejiang was restarted in early April, and another 2.2 million tons/year production capacity device has also been restarted and is operating at full capacity. However, according to the latest maintenance plan, the high operating rate will fall back this week. At present, PTA’s cash flow is relatively healthy. EG construction started fell back to 70.33%, a month-on-month decrease of 7.28%. The maintenance equipment is mainly coal-based MEG equipment. Since the current oil price is at a low level, the cash flow of the oil-based equipment is good and the construction start-up is at a high level.
Downstream polyester end
Production and sales increased significantly last week. The inventory of polyester products represented by POY dropped significantly, but it is still at a high level. The overseas epidemic situation The impact on terminal consumption still exists, and the mentality of downstream companies is still cautious. In the medium term, downstream companies are still cautious and bearish.
Taken together, pressures from a downward shift in crude oil prices, poor downstream consumption and high inventories still exist.
Strategic advice suggests short selling on PTA and EG. (For reference only)
Main risk points
Second spread of domestic epidemic, unexpected reversal in OPEC+ negotiations
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