At the beginning of 2020, the market received a new year’s red envelope from the central bank. In order to support the development of the real economy and reduce the actual cost of social financing, the People’s Bank of China decided to lower the deposit reserve ratio of financial institutions by 0.5 percentage points on January 6, 2020. The central bank stated that this RRR cut is a comprehensive RRR cut, reflecting counter-cyclical adjustment, releasing more than 800 billion yuan of long-term funds, reducing bank funding costs by about 15 billion yuan per year, effectively increasing the stable source of funds for financial institutions to support the real economy, and reducing Financial institutions support the capital costs of the real economy and directly support the real economy.
At the same time, Trump hinted According to new news about the signing of the agreement, Trump is expected to sign the first phase of the agreement with high-level Chinese representatives at the White House on January 15, 2020. He will later travel to Beijing to begin negotiations on the second phase of the agreement. Since the end of the year, Sino-US trade progress has continued to make breakthroughs. On December 13, 2019, China and the United States reached agreement on the text of the first-phase economic and trade agreement. On the evening of December 20, the two heads of state had a telephone conversation at request. Trump said that the conclusion of the first phase of the economic and trade agreement between the United States and China is a good thing for the United States, China and the entire world. The United States is willing to maintain close communication with China and strive to sign and implement it as soon as possible.
In addition to the above two expected good news, the sudden outbreak of the US-Iran conflict has set off a new round of storm. Affected by this, international oil prices and gold prices have surged. Brent crude oil has once again exceeded US$70 per ton since May 2019, and gold prices have also reached a new high since March 2013.
However, under the threat of the traditional off-season, terminals have been cautious in their purchasing intentions. Domestic polyester filament inventory days increased slightly last week. Among them, FDY inventory days increased by 0.4 days to 10.5 days, DTY inventory days increased by 1 day to 13.5 days, and POY inventory days increased by 0.8 days to 8.4 days. Overall, the inventory situation of polyester factories is good. The inventory days of polyester chips decreased by 0.1 days to 1.9 days, a year-on-year decrease of 1.1 days, and the production and sales rate was 70.75%. The inventory days of Shengze Weaving Enterprises were 37 days, a decrease of 0.5 days month-on-month and an increase of 2 days year-on-year. The operating rate of looms in Jiangsu and Zhejiang decreased by 7% to 48%, and the operating rate of texturing decreased by 8% to 61%. As the new year is approaching, the terminal operating rate has accelerated its decline.
On the supply side, the domestic PTA equipment maintenance plan in December is currently There are 2.2 million tons/year equipment of Hanbang Petrochemical’s large line and 1.2 million tons/year equipment of Hanlun Petrochemical planned to be overhauled. Another 1.1 million tons/year equipment of Xinfengming Phase 1 line has been put into operation. At the end of the year, there are also Zhongtai Petrochemical and Hengli Petrochemical Line 4 device is scheduled to be put into operation, and the supply of PTA will further increase in the later period. On the demand side, there have been an increase in plans to reduce and suspend production of polyester plants recently. The planned maintenance capacity of polyester in December totaled 1.44 million tons. The polyester market has also entered the off-season mode. In the later period, market transactions will most likely remain flat, and PTA demand will weaken. In terms of inventory, with the further improvement of PTA supply and the increase in maintenance of downstream equipment, it is expected that domestic PTA social inventory will accumulate in December.
Taken together, the current PTA processing profit is still at a low point during the year. The compression of processing fees has triggered the maintenance of multiple sets of equipment, and the market supply has shrunk month-on-month. In the short term, PTA has strong cost-side support. Under the dual influence of favorable macroeconomic factors and geopolitical factors in the Middle East, oil prices are expected to remain high in the short term, which will continue to inject a “boost” into the polyester market, which performed flatly at the end of the year. The current inventory of polyester yarn factories is low, and in the face of hoarding, the price of polyester yarn may rise slightly. </p
