Recently, China-U.S. trade has released positive signals, and the cost-side and macroeconomic sentiment have warmed to boost the PTA market. Hengli Petrochemical and Zhongtai Petrochemical have successively announced news of delays in the commissioning of new units during the week, which has eased the market’s response to the PTA supply side to a certain extent. Pessimistic expectations. While costs continue to rise, there are also slight changes in supply and demand. For example, the stocking market before the year helped to boost the continuous recovery of polyester production and sales, and the inventory of finished products dropped.
However, this does not mean that the PTA supply and demand pattern has changed. This is because polyester factories have not further expanded their cash flow profitability due to the recovery in production and sales. Instead, they have fallen into a vicious cycle of declining finished product inventory and profit losses.
The recent production reduction of polyester factories, downstream stocking and rising raw materials are the main drivers of this recovery in production and sales; however, the restart of Hanbang petrochemical unit has caused PTA to enter the inventory accumulation cycle again , and at the same time, as the polyester equipment began to undergo maintenance one after another, and some PTA equipment completed the maintenance and resumed production, PTA also returned to the rhythm of downward pressure before November.
The current spot price is 4,860 yuan/ton, the main contract is 4,922 yuan/ton, the basis difference is -62 yuan/ton, and the recent processing difference is basically floating around 550 yuan/ton.
But this downturn is just the beginning, because in the future, especially around the Spring Festival holiday, PTA will face cost decline and A double attack from overcapacity.
Polyester factories still have pessimistic expectations about the future supply and demand pressure of raw materials, and future orders will shrink significantly as the holidays approach. The recent production reduction plans announced by polyester factories can be seen as downstream preparations for weaker future demand expectations. With such pessimistic expectations, the chances of PTA demand improving are relatively limited.
The current polyester production capacity that has entered maintenance has reached 3.29 million tons, and there are still 8.37 million tons of equipment that will enter maintenance from late December to mid-January. According to the current maintenance plan announced by polyester factories, since most maintenance companies are concentrated in January, the month-on-month decline in polyester production in December is less than 1 percentage point, and the month-on-month decline in polyester production in January will reach 8 percentage points.
At present, most PTA devices have basically completed annual inspections, and only Hailun Petrochemical maintenance plan exists in late December. Looking at January, Fuhai Chuang is expected to reduce its load, and there are certain uncertainties in the maintenance of other devices. Although the new production capacity of Zhongtai Petrochemical and Hengli Petrochemical have been delayed in putting into production, the delay is not long, and the overall supply of PTA is still gradually accumulating.
Recent PTA supply-side changes expected table
The polyester load continues to decline, and the PTA load remains high. This is the supply and demand for PTA status quo. This week, the polyester load was 85.6%, and PTA’s profit demand load was 87.38%. However, the actual PTA load was 93.3%, and the PTA load gap was 5.92%, and the actual load has been higher than the demand load for four consecutive weeks.
In terms of terminal demand, the downstream market has entered the traditional off-season since December, and the demand for gray fabrics and fabrics has been relatively weak. Various manufacturers We insist on buying raw materials as they are used, and the inventory is generally high, and funds are even tighter.
The comprehensive operation rate of looms in Jiangsu and Zhejiang has declined month-on-month. The overall orders of most weaving companies are dominated by “small batches and multiple batches”, and most of them maintain stable startups. Currently, looms in Jiangsu and Zhejiang The comprehensive operating rate remains near 70%, and the market has insufficient follow-up on subsequent orders. The terminal factory’s orders for autumn and winter clothing fabrics are basically coming to an end, and the delivery of goods is not smooth.
Recently, there are expectations for equipment maintenance and new production capacity on the PTA supply side. Zhongtai Petrochemical’s 1.2 million tons of PTA plan12 It will be put into production on March 25-26; and downstream polyester will also enter a stage of gradual production reduction. It can be seen that the weakening trend of supply and demand will gradually become apparent, which will accelerate the accumulation of PTA. Without new positive stimulus, PTA will mainly weaken and adjust.
Of course, we also need to pay attention to the following risk points:
1. Although the Spring Festival holiday is approaching, the current inventory of polyester is low. Production cuts and shutdowns will be postponed in order to stock up, and we still need to pay close attention.
2. There are still two issues with the new PTA production capacity in the first quarter that require further observation: first, whether it can be put into production as scheduled, and second, whether the load can quickly reach a high level after being put into production.
3. Will OPEC+ continue to deepen production cuts, thereby raising crude oil prices and providing support to PX and PTA. </p
