As a recognized product with overcapacity, PTA has never lacked bearish voices every time it rises, but this has not stopped PTA from continuing to rise after the Spring Festival. Among them, cost plays a decisive role in this round of rise. Before the upstream cost side declines, PTA does not have the conditions for short selling.
Profit compression due to overcapacity does not mean that prices will necessarily fall
PTA production capacity has expanded in recent years Rapidly, inventories are high, and the problem of oversupply has always been prominent. However, the most direct impact of oversupply is corporate production profits rather than the absolute price of PTA. Since January, as the strength of crude oil has led to the recovery of PX prices, PTA processing fees have shrunk significantly. PTA spot processing fees have dropped from about 550 yuan/ton at the end of December last year to less than 300 yuan/ton in late February. There is no profit in factory production. Therefore, the PTA factory has more maintenance plans in March and April, and the processing fee compression space has become narrower. The impact of costs on PTA prices has become more obvious. After crude oil strengthened further, PTA began to rise continuously on February 22, and then rose again last week after crude oil fell from its highs. In short, the main driving factor for PTA’s strength is cost, provided that processing fees continue to be compressed.
The OPEC+ oil-producing countries meeting was more positive than expected, and crude oil is difficult to fall back in the short term
The market generally expects 4 Saudi Arabia will cancel an additional 1 million barrels of production cuts in March, and OPEC+ oil-producing countries will increase production by 500,000 barrels. The final result of the OPEC+ oil-producing countries meeting exceeded expectations. Not only did Saudi Arabia not cancel additional production cuts, other countries also increased production less than expected (only Russia and Kazakhstan increased production by 150,000 barrels in April). The unexpected benefits have pushed oil prices to rise continuously.
On the basis that oil-producing countries have maintained production cuts, the US $1.9 trillion economic stimulus package is about to be passed this week. The good news is superimposed on the good news, and crude oil will most likely maintain a trend of rising easily but difficult to fall. To change the trend direction of crude oil, we mainly need to look at the supply side. One is Iranian supply. The current US-Iran negotiations are still in a stalemate. Higher oil prices may stimulate Iran to make concessions to resume exports as soon as possible; the other is the output issue of OPEC+ oil-producing countries. , it will be sooner or later to increase production, but the market expects that the increase may not occur until late March. At the same time, in addition to the supply level, we also need to pay attention to the expected shift in U.S. monetary policy and the periodic impact of a stronger U.S. dollar index on crude oil. It will take time for the above-mentioned potential negative effects to materialize, and crude oil will most likely maintain a strong trend before late March.
Polyester profits and construction starts have rebounded rapidly, and PTA demand is guaranteed
At present, PTA downstream polyester The overall operating rate of polyester has rebounded to 90%, reaching the normal level before the Spring Festival, and the recovery rate of polyester production is faster than the same period in previous years. This is related to the “Celebrate the New Year on the spot” initiative. More importantly, the market’s optimistic expectations for textile and apparel demand after the Spring Festival have boosted terminal enthusiasm for restocking. The price of polyester products continues to rise and profits are improving, which further stimulates the post-holiday polyester market. Quick recovery of end-to-end operations. Although the prices of upstream raw materials PTA and MEG have increased significantly recently, compared with the beginning of February on March 5, the profit of spot production of short fiber increased by 200-300 yuan/ton, and the profit of DTY and POY filament production increased by 400-600 yuan/ton. .
The improvement in profits of polyester products shows that downstream terminal demand has improved significantly. Next, the polyester operating rate will remain at a high level, the demand for PTA and MEG continues to improve, and the improvement of the global epidemic has boosted the market demand for textiles. At present, the loom operating rate in Jiangsu and Zhejiang has also returned to the normal level of about 80%.
Prospects for the market outlook
The market outlook for PTA still depends on cost. Due to the limited room for shrinkage of processing fees, in the near future The impact of costs is very obvious, and the trend closely follows that of crude oil. Driven by the improvement in crude oil, PTA will most likely maintain a strong trend. If a large number of equipment maintenance plans in March and April are fulfilled, PTA’s strength will be more sustainable. The time to short PTA has not yet arrived. </p
