Affected by the spread of the new coronavirus epidemic around the world, PTA futures prices continued to fall last week. However, PTA futures prices rebounded this week due to factors such as OPEC+’s possible deepening of production cuts. We believe that the market is still worried about the epidemic, and high domestic inventories will continue to suppress PTA futures prices. It is expected that the rebound of PTA in the short term will be highly limited.
The number of confirmed cases abroad is increasing
Currently, the domestic COVID-19 epidemic has been effectively controlled. According to the latest report from the National Health Commission, as of 24:00 on March 3, there were 27,433 confirmed cases in the country, with a total of 80,270 confirmed cases reported and 520 suspected cases. Although the domestic epidemic situation continues to improve, confirmed cases of new coronary pneumonia overseas have begun to increase. The latest data shows that as of 12:00 on March 4, a total of 12,699 confirmed cases of new coronary pneumonia have been reported outside China. Among them, the cumulative number of confirmed cases reported in South Korea, Italy, and Iran has exceeded 2,000, and the cumulative number of confirmed cases reported in Japan has also reached 1,000. The spread of the COVID-19 epidemic around the world has caused renewed turmoil in the financial market. The uncertainty about the development of the epidemic may cause large fluctuations in the commodity market in the short term.
Temporary parking and load reduction are increasing
In February, due to weak downstream demand, PTA inventory continued to increase, and many domestic PTA devices started maintenance to ease the business pressure. According to the current plan, Pengwei Petrochemical’s 900,000 tons/year device and Fuhai Chuang’s 4.5 million tons/year device will be overhauled. However, the only devices that are about to complete maintenance and repair are Sichuan Neng’s 1 million tons/year device and Hanbang Petrochemical’s large line. 2.2 million tons/year installation. Considering that the current PTA social inventory has reached a record high, the probability of temporary shutdown or load reduction of PTA equipment has increased, so there is still the possibility of continued decline in the start-up of PTA equipment in the later period. As of March 3, the daily operating rate of domestic PTA devices was 82.64%, down 0.13% from the same period in 2019.
Affected by the domestic new coronavirus epidemic, the resumption of work and production of polyester companies this year has been delayed compared with previous years. Since February 17, some polyester companies have begun to resume production, and the operating rate of polyester plants has rebounded from the low point of the year. However, because polyester companies are labor-intensive, they are facing greater pressure from epidemic prevention and control, and the employee attendance rate of the company has been declining. It is difficult to quickly return to normal conditions, and it is difficult for the operating rate to increase significantly in the short term. As of March 3, the comprehensive daily operating rate of domestic polyester plants was 69.64%, a decrease of 16.82% from the same period in 2019.
Social inventories hit a new high
After pta social inventories fell to a low of 1.257 million tons in recent months on November 29, 2019, they began to accumulate continuously. library, and the accumulation range is gradually expanding. As of February 29, 2020, PTA social inventory has reached 2.84 million tons, a significant increase of 1.4725 million tons compared with the same period in 2019, setting a record high since records began. Since the mismatch between supply and demand of PTA is difficult to significantly improve in the short term, and the pressure on PTA social inventory is difficult to be alleviated, PTA futures prices will continue to be under pressure.
In summary, although the domestic epidemic situation continues to improve, the increasing number of confirmed cases overseas has made the short-term market uncertain. PTA social inventory will continue to accumulate, and the rebound in PTA futures prices is highly limited. </p
