On the evening of July 6, 2021, the Biden administration held talks with officials from Saudi Arabia and the United Arab Emirates, hoping to reach an agreement to increase production to prevent oil prices from rising too quickly, and the market was worried about the potential for a price war among OPEC+ oil-producing countries due to differences. Risks, international oil prices fell the most since the end of May. NYMEX crude oil futures 08 contract fell by US$1.79/barrel to 73.37; ICE Brent oil futures 09 contract fell by US$2.63/barrel to 74.53, a drop of 3.41%, the largest decline since mid-May.
What followed was a sharp fall in the big brother of polyester, PTA. After the domestic futures market opened on July 7, the price of PTA opened lower and moved lower, closing at the lower limit. That night, international oil prices fell again, with BRENT crude oil futures hitting a low of $72.6/barrel, and PTA futures leading the market decline in the night, with a drop of more than 4%.
In just four days, the price of PTA changed from leading the rise to leading the fall, which is staggering! In the end what happened?
Dragged down by the appearance of oil prices
But the fundamental reason for PTA’s collapse is still because of it
PTA’s main recent variable is oil prices, but the fundamental reason is that it is at the peak of its production capacity, its production profits are thin, it lacks active directional driving, and it is greatly affected by the fluctuation of raw materials. .
In the first half of the year, PTA production capacity and social inventory reached record highs. Under supply pressure, PTA processing fees once fell to a nearly five-year low. New highs in production capacity and social inventory have squeezed PTA processing fees. The average monthly PTA processing fee in March was 335 yuan/ton, falling to the lowest level since July 2016.
Under the rapid expansion cycle of PTA, the expansion speed of PTA is much higher than that of downstream polyester. In the first half of the year, the industrial chain processing fees were transferred to downstream polyester. The average daily theoretical profit and loss in the first half of the year was : PTA has a loss of 191 yuan/ton, polyester filament POY has a profit of 500 yuan/ton, polyester filament FDY has a profit of 324 yuan/ton, polyester staple fiber 1.4D has a profit of 276 yuan/ton, and polyester bottle flakes have a profit of 154 yuan/ton.
The current spot processing gap has been reduced from more than 600 yuan/ton to around 500 yuan/ton. The processing difference in the first half of this year has been below 300 yuan/ton for a long time, while the price of the auxiliary material acetic acid has been rising, eroding industry profits. Based on the calculation that 30-36.5 kilograms of acetic acid is used to produce each ton of PTA, the average monthly cost of acetic acid consumption in the first half of the year is 222 yuan/ton, and the total cost of PTA packaging is about 264 yuan/ton, while the average PTA processing fee in the first half of the year is only 409 yuan/ton. , after excluding acetic acid and PTA packaging costs, the remaining PTA processing fee is about 145 yuan/ton, which cannot cover depreciation, energy consumption, labor and other costs in the production process. Some small PTA factories use about 39 kilograms of acetic acid per ton of PTA produced. The high price of acetic acid puts greater cost pressure on small PTA factories.
Production losses forced large-scale maintenance of factories, Hanbang Petrochemical 2.2 million tons, Reignwood Petrochemical 1.4 million tons, Liwanju Many units including 650,000 tons of esters and 400,000 tons of Shanghai Petrochemical were forced to shut down during this period. As of now, these units are still in a shutdown state. After the short-term processing gap is compressed, the decline of PTA will gradually narrow and closely follow the trend of raw materials again.
Optimistic expectations for the downstream peak season
However, the commissioning of huge new devices is still continuing
The peak season in the second half of the year is approaching. The industry’s expectations for the peak season are optimistic, but the recent During the rise, some downstream companies have stocked up in advance, and filament stocks have dropped significantly. When the peak season actually arrives, under unanimous optimistic expectations, various downstream links may have been quietly preparing. If there are no unexpected orders, the demand for raw materials in the peak season is likely to be tepid. If orders can explode like last year, it will bring periodic benefits. However, judging from the market performance this year, exports were obviously restricted by high freight rates and tight shipping capacity in the shipping market in the second quarter. The growth rate of textile and clothing exports in May has slowed down significantly compared with April. In terms of domestic demand, after the surge in volume in the second half of last year, home textiles, which performed well, turned significantly sluggish in the second quarter of this year.
In the second half of the year, PTA will first digest the 2.5 million tons of the second phase of Zhejiang Petrochemical which was put into production in June. The new supply of PX and Yisheng New Materials is 3.5 million tons of PTA, and another set of 2.5 million tons of PX and 3.5 million tons of PTA will be put into production at the end of the year. This year, due to the large output of PTA at the beginning of the year and the frequent maintenance of old PX equipment, the price difference between PX and naphtha continued to recover, but the maintenance volume of old equipment decreased in the second half of the year. After Zhejiang Petrochemical PX was put into production, the supply of PX increased, and the price may be under pressure. , bringing expectations for PTA’s cost to weaken. Therefore, PTA prices will face downward pressure from PX adjustments and its own supply growth in the second half of the year. The relative price will still remain low, and the absolute price will continue to depend on oil prices.
To sum up, PTA’s recent bullish sentiment has improved Heats up, but oil prices change face, giving bulls a head startRemember the hard hit. After the short-term PTA processing gap was compressed, and without new negative pressure, PTA prices once again kept pace with oil prices. If there is no centralized maintenance in July, the contradiction between supply and demand will be relatively flat, the fundamentals will lack driving force, and fluctuations will dominate. However, the long and short differences will still exist, and the fluctuations are expected to be more violent!
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