Market Review
International oil prices fluctuated at high levels, and PTA followed the cost range fluctuations. As of the close of March 27, PTA2105 closed at 4,432 yuan/ton, an increase of 126 yuan/ton from the previous month. tons, an increase of 2.93%. The spot price of PTA is 4,305 yuan/ton, down 40 yuan/ton from the previous month, or 0.92%. The basis difference of PTA is -127 yuan/ton (-68).
Fundamental analysis
Emergency events have caused international oil prices to fluctuate at high levels. An Evergreen Marine ultra-large container ship ran aground in the Suez Canal, causing a two-way blockage of the Suez Canal channel. According to data from tanker tracking companies, global crude oil seaborne trade totaled 39.2 million barrels per day in 2020, of which 1.74 million barrels per day passed through the Suez Canal. In addition, 1.54 million barrels per day of refined oil products such as gasoline and diesel pass through the canal, accounting for approximately 9% of global seaborne product trade. A blockage of the waterway could lead to massive shortages of goods and higher shipping prices. At present, the stranded cargo ship in the Suez Canal has escaped and the time for the canal to reopen has not been determined. More than 450 ships have been lined up waiting to pass through the Suez Canal. Recently, the number of new cases has rebounded in some European countries and parts of the United States and India, and local travel restrictions have been re-implemented or extended, raising concerns about a slowdown in the recovery of crude oil demand. Taking into account the current recurrence of the epidemic in some countries and regions, there are still certain obstacles to the recovery of crude oil demand, and the April OPEC+ meeting may continue to maintain a cautious and restrained oil production policy. It is expected that oil prices will fluctuate at high levels in the short term, and we will pay attention to the support near Brent 60, as well as the development of the epidemic, the advancement of vaccines, and the situation of the OPEC meeting.
PX load picks up. Internationally, Japan’s JX 250,000 tons is planned to restart, South Korea’s SK 400,000 tons is planned to be inspected for 40 days in May, Hanwha Chemical’s 1.2 million tons is planned to be inspected for 45 days in mid-May, and Thailand’s Aromatics 2#770,000 tons is planned to be inspected for 15 days in mid-May. . Domestically, Zhejiang Petrochemical’s No. 1 2 million tons/year unit reduced production due to catalyst problems on March 18 and has now returned to 90% operation. Fuhaichuang 2#800,000-ton PX production line will be shut down on December 12, 2019, with initial plans to restart in late April. Shanghai Petrochemical will conduct maintenance from March 11 to June 9, Qingdao Lidong’s 1 million tons PX unit plans to conduct maintenance for 40 days from March 20, and Wu Petrochemical’s 1 million tons plans to conduct maintenance for 25 days in May. The domestic PX load is at 79.8%, an increase of 6.8 percentage points month-on-month. The price of PX is US$815/ton (+17), which is equivalent to the cost of PTA 4603 yuan/ton. The price difference between PX and naphtha is US$234/ton (+12).
PTA maintenance is gradually implemented, and polyester links are accumulated. In terms of PTA equipment, Ningbo Taihua’s 1.2 million tons plant was temporarily shut down and then restarted. The 400,000-ton units of Shanghai Petrochemical, 1.4 million tons of Reignwood Petrochemical, and 1.2 million tons of Zhongtai Petrochemical are under maintenance. The Zhuhai BP 1.25 million ton unit was scheduled to undergo maintenance and restart ahead of schedule on March 17. The other 1.1 million ton unit has been restarted after a brief shutdown. Sichuan Neng Chemical’s 1 million tons will be inspected for 20 days starting from March 29. Domestic PTA operating load was at 82.8%, down 1.7 percentage points from the previous month. In terms of new equipment, the 3.3 million tons of Yisheng New Materials is scheduled to be put into operation in mid-to-late April. The spot processing difference of PTA has been reduced to 288 yuan/ton. Currently, the equipment that has implemented the maintenance plan involves a total production capacity of 7.55 million tons. In April, domestic PTA equipment has a planned maintenance plan of 8.4 million tons. Pay attention to the implementation of subsequent maintenance. The downstream polyester load was 90.5%, a month-on-month decrease of 0.7 percentage points; the loom load in Jiangsu and Zhejiang increased to 84.4%, a month-on-month increase of 0.9 percentage points. Affected by fluctuations in raw material prices, the market mentality is cautious. Polyester production and sales have been promoted with price cuts, but follow-up of polyester production and sales has been limited. The cash flow of polyester products has declined, and polyester product inventories have increased month-on-month.
Conclusion and operational suggestions
On the supply side, the PTA processing gap has been reduced to less than 300 yuan/ton. At present, the PTA maintenance plan has been implemented for the devices with a total production capacity of 7.55 million tons. In April, domestic PTA devices have a pending maintenance plan of 8.4 million tons. Pay attention to the implementation of subsequent maintenance. The downstream polyester load was 90.5%, a month-on-month decrease of 0.7 percentage points; the loom load in Jiangsu and Zhejiang increased to 84.4%, a month-on-month increase of 0.9 percentage points. Affected by fluctuations in raw material prices, the market mentality is cautious. Polyester production and sales have been promoted with price cuts, but follow-up of polyester production and sales has been limited. The cash flow of polyester products has declined, and polyester product inventories have increased month-on-month. Affected by shipping emergencies, international oil prices fluctuated at high levels. Under the guidance of cost, it is expected that short-term PTA futures prices will maintain a range-bound oscillation trend, focusing on support near 4200 points and the OPEC meeting at the beginning of the month. </p
