Long and short intertwined PTA dilemma

In the near term, although crude oil rebounded strongly, the PTA price did not have a sharp performance. Since the beginning of March, PTA price has been fluctuating in the range of 4650-4950 yuan/ton. On the one hand, the raw material end supports the production cost of PTA, and the price of PTA is closed down; on the other hand, the spot fundamentals of PTA are still not good, warehouse receipts continue to emerge, and the market is formed under pressure. In the past few days, PTA positions have continued to be high, and the major and short-term main forces have made significant competition. Under this background, PTA will continue to maintain a wide-range oscillation pattern in the short term.

Raw material performance is strong

OPEC members and other major oil-producing countries had previously held freeze-yielding conferences and wanted to freeze oil production until January this year. In line with the generally good expectations for the meeting, oil prices rose sharply before the meeting. However, Iran’s refusal to participate in freeze-producing actions led to the collapse of long-term confidence in the crude oil market. The international oil price continued to rise even further and it was caught in an oscillation situation.

In the downstream PX, PX prices are relatively stable in the face of large fluctuations in oil prices. In the news, Taiwan's Formosa Chemical's 287,000 tons/year PX unit was shut down for maintenance. However, the PX load of Pengzhou Petrochemical Company increased, and the overall domestic load was over 80%. Considering that the PX unit in the Asian market has a maintenance plan, it may cause phased supply. Tighter, thus forming support for PTA prices.

The overall operating rate of the industrial chain is high

The operating rate of each link is currently at a relatively high level. The average load of downstream polyester factories and weaving companies in Jiangsu and Zhejiang also reached 84.5% and 77%, respectively, which is equivalent to the same period in 2015. However, the PTA operating rate was 10 percentage points higher than that of the same period of last year. Due to the impact of the Tenglong aromatic bomb explosion at the beginning of April last year on the PTA plant, it also gave the market certain speculative opportunities, and the commodity inventories declined rapidly. The market showed supply for a time. In the shortage state, the increase in demand caused the PTA** main contract to rise by nearly 1,000 points in April of that year.

The average operating rate of the recent PTA manufacturers reached 72.5%. Although in late April, Yangzi Petrochemical, Helen Petrochemical, and other manufacturers have maintenance plans, the restart of the new units of Ningbo Ningbo and Hanbang will compensate for the short-term shortage of PTA production capacity.

The current PTA manufacturers have more market share in the "spelling" market, and the profitability status is still not greatly improved. In this context, the PTA period price does not have the conditions for a sharp rise.

Increased warehouse receipts exacerbated market pressure

In the second quarter of last year, the single degree of PTA ** stock exceeded 160,000, equivalent to 800,000 tons of PTA production capacity. This year's history seems to be repeating itself again. Since March, the number of PTA ** warehouse receipts has been growing. As of now, warehouse receipts have reached 146,000, and effective forecasts have also reached nearly 10,000, almost the same period last year.

Although the downstream start-up load was relatively high, the polyester industry did not see a clear turn for the better. The price of polyester filaments remained in a long-term downward trend, and the production and sales ratio was not very optimistic. The average production and sales of polyester filaments was only 80%, and staple fibers were weaker. Only about 50%. In addition, the current PTA** 200 yuan per ton of water, the relative high price of the period of the short-term injection of power for enterprises, post-warehouses or will continue to increase.

To sum up, despite the raw material endorsement, the effective capacity load of the PTA industry is high, and the overall supply of the market has not been reduced. Coupled with the suppression of a huge amount of warehouse receipts, the PTA price is in a dilemma, and the market outlook may continue to fluctuate.