How Will The PTA Market Be Interpreted In The Second Half? Uncertainty Remains

This spring, just as the traditional demand for textile and clothing in the lower reaches is coming,

According to tradition, 6-8 months should be the off-season demand for downstream textile and clothing. From a common sense, the weakness of PTA will be even more difficult to improve. But at this point, PTA unexpectedly rebounded, and the 1009 contract reached the highest level in June 21st to 7546 points, with a rebound of nearly 500 points.

This year's PTA market has made many people in the industry wonder. Is the market really volatile? It's against the fundamentals. In fact, the development of PTA market is not strange.

In view of many factors, the track of PTA coincides with the changes of fundamentals.

Overall, downstream

Although the downstream demand remains relatively ideal, the negative factors still prevail.

Since the second half of last year, because PTA production load has been maintained at 90% or above, and imports have not declined, so although the surplus is not obvious, but a lot of accumulated, we can see from the futures market warehouse receipts quantity (as shown in Figure 1).

The amount of warehouse receipts increased from October last year, reaching third highs in May this year.

Despite the recent decrease in warehouse receipts, the total is still 38 thousand (5 tons / ton, a total of 190 thousand tons).

As PTA production profit is still relatively ideal, generally maintained at 1000 yuan / ton or above level, so PTA manufacturers have higher production enthusiasm, and the operating load will remain at 90% or above.

In addition, the import volume of PTA remains at a high level, and the overall space of import deficit is decreasing, so imports will not shrink significantly.

Because of this, there is little possibility of falling supply.

Another important factor in the PTA market is cost collapse.

The direct raw material PX of PTA will supply more pressure this year.

Since the launch of a number of new PX installations in Asia last year, the relationship between supply and demand has changed significantly.

At present, the production profit of PX can only be maintained under the profit and loss balance line, and PX itself has no upward force due to oversupply, its price can only be driven by the ups and downs of upstream.

To sum up, the bearish factor is far greater than the support of downstream demand, resulting in an early end of the PTA market in spring, and a drop in the market driven by the drop in crude oil and downstream petrochemical aromatics products.

Looking at the rebound in June, the first is the rebound in crude oil and upstream petrochemical products, and the cost support of PTA is reappearing.

Secondly, the law of "buying up, not buying down" in the downstream market makes many enterprises PTA inventory level drop to a very low level, and the demand for filling up is imminent.

In addition, the more than 1500 point decreases the market sentiment.

At this time, the fuse appears: affected by the requirements of saving and emission reduction in Zhejiang Province, the high energy consuming enterprises should cut down production for 15 days, involving 61 polyester and polyester enterprises, which is affected by the rush to buy downstream. Polyester sales have been hot, prices have surged rapidly, and gross profit has also increased rapidly. At present, tons of silk have more than 2000 yuan and more profit margins.

With the advent of a long bad day, the enthusiasm of polyester enterprises has been very high, and the demand for short-term PTA has also increased.

This sudden factor, renewed the market popularity of PTA, PTA passive push up.

But after the rush to buy, the market returned to reason, and PTA fell back. PTA spot saw another bottom 7088 on July 2.

Technically, it looks like a double bottom. Can the market really reverse? How will the PTA market be interpreted in the next few months?

The author believes that there are still uncertainties about the major factors affecting the current PTA price change.

First, the energy saving and emission reduction in Zhejiang province. The reduction of high energy consumption polyester enterprises is likely to be discounted due to the high profits of production.

It is reported that at present, the attitude and enforcement of all enterprises in this area are different from each other. Some enterprises in some areas have already planned to stop overhauling and reduce production and reduce their burden according to their own actual conditions. However, there are no definite plans for enterprises in more areas, and the following plans should be made according to the requirements of local governments and power departments.

Although it is impossible to reduce the demand as a whole, the gradual reduction of stop is an inevitable fact.

In this way, the demand for PTA is bound to be affected.

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Two, after the downstream rush to buy, the enthusiasm for purchasing has declined, and polyester sales have been quiet. Recently, some products have come down by 100-200 yuan / ton.

Although the downstream demand remains rigid, the hot and hot weather in 7-8 has hit a large area in most parts of China, and the off-season of textile and clothing is likely to come gradually.

The three is the high level of PTA's own production profits, so the production load will not change significantly, and the import side will also be reduced due to the narrowing of import losses. There will not be a significant reduction in the volume of the warehouse receipts. The volume of warehouse receipts in the futures market is very large, and it has always been a stone in the PTA market in recent months.

If the crude oil does not increase significantly in the future, PTA will still be dominated by its own supply-demand relationship, with the trend of partial air being the main trend, and the latter market will continue to search for the bottom.

The only way to change the direction of PTA is still the trend of crude oil.

If crude oil unexpectedly rises, PTA will also quickly turn upward and upward.

Therefore, next, we should not only pay attention to the change of supply and demand situation of PTA, but also pay more attention to the trend of crude oil.