The pattern of oversupply remains unchanged
Since May, the epidemic in Europe and the United States has eased, countries have gradually restarted their economies, and the market demand for crude oil has slowly recovered. In addition, OPEC+’s production cuts are being implemented well, and international oil prices have bottomed out and rebounded. So far, the main contract price of WTI crude oil has risen from a minimum of US$21.99/barrel to around US$40/barrel, doubling in one and a half months. The sharp rise in oil prices has caused the center of gravity of PTA costs to continue to shift upward, and PTA prices have oscillated upward under the effect of cost support. However, the situation of oversupply of PTA has not changed, and there are many hidden dangers in the current rise.
Cost support weakens
When the global epidemic did not break out completely and OPEC+ did not announce that it would not extend production cuts, the oil price level was around US$50 per barrel. On March 6, OPEC+ announced that it would not extend the production reduction agreement. As oil prices plummeted, OPEC+ quickly implemented a production reduction agreement of 9.7 million barrels per day. However, the intensity of the production reduction was gradually declining and was not enough to offset the oversupply in the market. question.
As of June 5, the U.S. commercial crude oil inventory announced by EIA reached 538.065 million barrels, an increase of 86.282 million barrels from March 6, an increase of 19.1%, a record high. The author believes that under the current circumstances, it is very difficult for crude oil to rebound to US$50/barrel, and the support for PTA from the cost side is limited.
Supply will increase in the short term
Affected by the epidemic, the problem of oversupply of PTA has intensified, production and operation conditions are poor, and inventory is much higher than in previous years . This has reduced the enthusiasm of PTA companies for production, and some companies have begun to suspend production for maintenance. As of June 12, the operating load of domestic PTA was 80.27%, down 2.8 percentage points from the same period last year. Not only that, a total of 8.1 million tons of equipment including Yangzi Petrochemical, Ningbo Petrochemical, and Reignwood Petrochemical are scheduled to be overhauled from June to August, and domestic supply is tight. However, in mid-June, PTA devices that were partially overhauled in the early stage will resume production, and market supply will increase in the short term.
In addition, due to the current relatively weak PX price, PTA processing fees have reached a relatively high level of 800 yuan/ton. The restoration of production profits will increase the enthusiasm of enterprises for production, and will not only prompt more maintenance equipment to resume production , and will cause companies with maintenance plans to postpone maintenance.
Polyester enters inventory accumulation mode
At the beginning of the relaxation of domestic epidemic control, PTA demand improved due to companies rushing orders and replenishing inventory. . However, as the consumption that was lagging behind due to the epidemic in the early stage is gradually released, the demand for PTA begins to decline. At present, the operating load of domestic polyester companies is still relatively high, but in the middle of the year, the summer equipment and stocking market is coming to an end, and the Sino-US trade friction has re-emerged, and the demand performance on the weaving end is relatively weak. This has caused the current polyester inventory to re-enter the accumulation mode, and the inventory is much higher than the same period in previous years. In this case, due to poor terminal consumption, it is difficult to maintain the operating load of polyester at a high level. The sustainability of PTA demand is doubtful, and the subsequent oversupply problem will appear, thus suppressing the price of PTA.
To sum up, the rebound in PTA prices is largely caused by the bottoming out of international oil prices. However, the current global epidemic situation is still not optimistic. U.S. commercial crude oil inventories have reached a record high, oil prices are difficult to sustain a rebound, and the cost-side support for PTA is gradually weakening. If PTA wants to continue its rise, it needs the cooperation of the supply and demand sides. From the supply and demand side, although maintenance of PTA equipment is intensive, as processing fees continue to rise, the early maintenance equipment will speed up the resumption of production. At the same time, the demand side is still not free from the impact of the epidemic. Rising polyester inventories will force polyester companies to reduce their loads, and the subsequent demand for PTA will decline. Based on the above judgment, the author believes that there are many hidden dangers in the current rise of PTA, and the probability of a later correction is high. </p
