Not long after the production reduction agreement came into effect, crude oil prices experienced a week of changes and extreme turmoil. Last Wednesday, as crude oil plummeted, market panic spread and PTA prices hit a record low. After oil prices bottomed out and rebounded, PTA prices also strengthened. However, in the context of a difficult-to-change situation with accumulated inventory, the strength of PTA’s rebound may be limited.
From a cost perspective: International crude oil prices have experienced violent turbulence. May U.S. crude oil futures closed at minus $37.63 per barrel last Monday and suffered the worst sell-off in history. Global benchmark Brent crude oil also took a hit last Tuesday, hitting a 20-year low before rebounding. In just one week, oil prices plummeted and surged, and PTA also fluctuated accordingly. During this period, PTA prices hit a record low.
Data source: Jin Lianchuang
From the supply side: Not many PTA devices have been shut down for maintenance recently. The operating rate last week remained at 82.74%, indicating sufficient market supply. The overstocking situation is getting worse. Last week, PTA social inventory was about 2.801 million tons, an increase of 57,000 tons from last week. It is still on the high side. PTA oversupply has become an industry consensus.
Data source: Jin Lianchuang
From the demand side: the recent downstream polyester production and sales have been light , polyester factory inventories are partially accumulated, and demand is not strong. The overseas epidemic situation has not significantly eased, and it still has a serious impact on PTA terminal exports. Textile foreign trade orders have shown a cliff-like decline, and the weaving start-up rate remains at around 53%.
Data source: Jin Lianchuang
Overall: the recent trend of crude oil is quite turbulent, with continuous After two days of sharp rise, PTA prices bottomed out and rebounded under the stimulation of rising costs. However, under the situation where the contradiction between supply and demand is prominent and the accumulated inventory pattern is difficult to change, PTA’s rebound strength is still limited. </p
