After the 15th day of the first lunar month, PTA prices gradually rose due to the gradual increase in crude oil, and the market price also pushed up rapidly. However, the increase was fleeting. The attack on Saudi oil installations did not cause supply disruptions. In addition, the U.S. bond yields The U.S. dollar rose across the board. After international oil prices surged during the session, bulls took profits and finally ended lower. Therefore, PTA, which is constrained by the cost side, also fell into a rational adjustment situation after the strong rising market.
Crude oil:
Brent and PTA price correlation chart trends
Source: Longzhong Information
On March 8, 2021, Brent crude oil futures once opened and rose by more than 71 The U.S. dollar/barrel broke through the integer mark of 70 U.S. dollars for the first time this year. The last time Brent futures saw 70+ was back on May 28, 2019, nearly two years ago. It is worth mentioning that a month ago, Brent just broke through the integer mark of $60, and it can be said that the rise has not stopped. The rise in crude oil has undoubtedly given impetus to the rise of PTA, but the rise has not continued. On March 9, it is expected that U.S. commercial crude oil inventories may continue to grow. In addition, the previous continuous surge has caused a fear of high prices in the market, and international oil prices continue to fall. . On Tuesday (March 9), WTI April 2021 futures fell by $1.04 to $64.01 per barrel, and Brent May 2021 futures fell by $0.72 to $67.52 per barrel.
PX market judgment:
Figure 2 Price related trends of PX and PTA
Source: Longzhong Information
In fact, from the end of 2020 to the present, the PX market has been delayed due to maintenance and restart of foreign and domestic equipment. and other factors, the overall market showed a narrow destocking state. The determination of the repair space for poor PX processing is the main factor affecting the high valuation of PTA. The processing fee for PX has increased from US$170/ton a year ago to the current US$250/ton. From March to April, the maintenance and commissioning of PTA units are relatively concentrated. Therefore, before the second phase of the PX unit of Zhejiang Petrochemical is put into operation, PX supply and demand are still in a tight balance. Therefore, we judge that the PX processing is poor and there is still motivation to continue repairing it.
There is a gap in the short-term spot supply:
Figure 3 Correlation trend between PTA price and operating rate
Data source: Longzhong Information
Source: Longzhong Information
In March, PTA processing fees are gradually reduced, and PTA enterprise installation and maintenance are also put on the agenda.
From the supply side, Hengli Petrochemical 4#2.5 million tons and Reignwood Petrochemical 1.4 million tons units both entered maintenance on March 6 as expected. Xinjiang Zhongtai’s 1.2 million-ton unit went into maintenance on March 8 due to a shortage of raw materials, and the restart time is to be determined. Yadong Petrochemical’s 750,000-ton unit is undergoing maintenance. The current operating rate of PTA is 75.20%, and there are still many devices that are still expected to be overhauled.
In terms of downstream demand, judging from the start-up load of polyester in recent weeks, the recovery is relatively ideal. The load of polyester is currently at 92.99%, including polyester profits. Further improvement and periodic improvement in supply and demand will provide support to the PTA market; however, PTA’s huge inventory and peak production phase will always suppress its rise.
So what we have to see is that crude oil fluctuates more frequently, and after the year, the spot price of PTA has been rising from 3940 yuan/ton to 4740 yuan/ton. . An increase of 18.88%. Therefore, after the periodic high point, the main bulls may be cautious to close their profit-taking positions. Based on the financial attributes of PTA, the futures market has been affected. As of the morning of March 10, the PTA05 futures contract has a partial limit of 4,448 yuan/ton.
The recovery of the terminal market is limited, and there is no lack of resistance:
As the price of downstream polyester continues to rise As prices rise, the resistance of terminal weaving companies is also increasingly emerging. Judging from the polyester production, sales and price increases in the past two weeks, terminal load recovery is limited. The main factor is still the increased price increase of polyester, and the small volume of new orders and profit Limited, resulting in low enthusiasm for downstream users to cover their positions.
Summary: The current cost increase is the main factor affecting the absolute price of PTA. Supply and demand tend to be positive in the short term, but we still need to wait and see for the recovery of macroeconomics and terminals. The PTA futures market may have a new adjustment direction. In the later period, more attention will be paid to corporate behavior and installation progress. </p
