Due to the impact of the COVID-19 epidemic, demand recovery this year has been weak. Against the backdrop of rapid growth in supply-side production capacity, PTA social inventories have reached record highs and prices have reached record lows. How to digest the huge inventory?
Manufacturer Hedging
On June 12, Zhengzhou Commodity Exchange warehouse receipts reached 227,061, equivalent to 1.1353 million tons. The reason for the rapid registration of warehouse receipts is the weakening of PTA basis. The weakness of the spot side caused the spot price to be lower than the futures market. Especially around June 12, a relatively reasonable risk-free arbitrage price appeared in the futures market. Against the background of high inventory and weak demand, a large number of hedging orders were carried out in the futures market. Preserve value. This solves the sales problem for spot companies that have difficulty finding orders, and at the same time withdraws funds in a timely manner.
Traders can do futures arbitrage
When the basis is at a periodic low, risk-free arbitrage costs can be covered, and the basis is judged to be stronger in the future , futures arbitrage opportunities appear. Traders buy spot and sell futures in order to earn profits from the strengthening basis. If the basis strengthens in the market outlook, you can take profits and leave the market in advance and sell the spot; if the basis does not converge and strengthen as expected, you can hold the spot and positions until the delivery month, register the spot as a warehouse receipt and enter the delivery process.
Whether it is manufacturers using the futures market to solve corporate inventories, or futures traders taking advantage of the risk-free arbitrage opportunities provided by the market to lock in spot liquidity in the short term, high inventories have been alleviated to a certain extent in stages. against the backdrop of spot market pressures. However, the inventory has not been truly digested.
Looking forward to the performance of the peak demand season
From the supply side, the maintenance of Taiwan Chemical, Sanfangxiang, and Yangzi Petrochemical units has begun to be implemented recently, and Hanbang temporary Load reduction and supply-side reduction have brought a certain boost to the market, and the market has been strong and oscillating. According to the delivery rules, all exchange warehouse receipts are withdrawn after delivery in September every year. The requirements for registering warehouse receipts are that the warehouse shall not accept PTA produced in China with a production date exceeding 90 days and imported PTA exceeding 60 days from the date of overseas shipment. This means that among the warehouse receipts facing centralized cancellation in 2009 contracts, some old goods that do not meet the delivery requirements will flow to the spot market in the short term.
From the cost side, the price difference between PX and naphtha is already at a historically low level. With the crude oil price center stable in the short term, cost side support appears.
From the demand side, the inventory of gray fabrics has recently dropped from 45.5 days to 45 days, a slight decline. Inventories of polyester filament and staple fiber also increased slightly. Attracted by low prices, short-term terminal orders show signs of improvement. With the arrival of the peak season of seasonal demand, downstream replenishment and order conditions are expected to drive the real digestion of PTA social inventory, thus boosting PTA prices.
In short, under the background of weak support on the cost side and seasonal boost expectations on the demand side, affected by the approaching delivery of the 2009 contract, the 2001 contract is at 3700-3950 yuan /t oscillation. </p
