Recently, sentiment in the chemical sector has been high, with prices rising at a high level. However, PTA prices have been extremely active. On February 23, the price limit was hit several times during the session. On February 25, the 05 contract opened again and reached the daily limit of 4,882 yuan/ton. Amid expectations of easing short-term costs and supply and demand, PTA is expected to continue its strong trend in March.
Crude oil surges, PX processing fee restored to US$269/ton
From the perspective of crude oil , Saudi Arabia’s agreement to reduce additional production by 1 million barrels per day from February to March accelerates the goal of rebalancing supply and demand in the global crude oil market; in addition, extreme cold wave weather has caused a decline in U.S. shale oil production, and full recovery may still take weeks; while the U.S. 1.9 The US$1 trillion epidemic relief plan continues to advance, and the market expects this plan to boost demand. In addition, the Federal Reserve continues to maintain an easy monetary policy and continues to purchase assets until the U.S. economy shows substantial progress. The quantitative easing monetary policy will continue to depreciate the U.S. dollar and provide continued positive support for international oil prices.
Judging from the poor processing of naphtha and PX, both have been well repaired. In particular, the processing difference of PX-N continues to be repaired. As of February 24, PX-N has reached US$269/ton, an increase of 38.66% compared with before the holiday. On the other hand, PTA processing fees have been continuously compressed. As of February 24, PTA processing fees were only 288 yuan/ton, down 11.66% from before the holiday. However, considering that the PX Asia ACP reached US$705/ton in February, some companies have already avoided risks in PTA costs in advance through the achievement of ACP.
With the sharp rise in crude oil prices, warming sentiment in the commodity market and the repair of PX processing fees, the cost side has moved up significantly, and the spot price of PTA has risen rapidly.
Many sets of devices are facing maintenance, and the maintenance capacity is expected to be 19.65 million tons
From the supply side : During the Spring Festival, Hainan Yisheng’s 2 million tons and Shanghai Petrochemical’s 400,000 tons units were shut down for maintenance, and the operating rate was reduced to 85.50%. Recently, some mainstream PTA suppliers have announced that they will reduce contract volume by 20% in March, and plan to have equipment undergoing maintenance from March to April. According to Longzhong Information statistics, multiple PTA equipment will face maintenance from March to April, and the maintenance capacity is expected to be as high as 19.65 million tons. (Including parked devices) See Table 1 for details. Although the second phase of Honggang Petrochemical’s new 2.5 million-ton unit is about to be put into operation, the start-up of the unit has been slightly delayed, and with the expectation of centralized maintenance of multiple units, market confidence is generally strong.
Table 1 Recent PTA device maintenance statistics (unit: 10,000 tons)
Source: Longzhong Information
Demand actively recovers, polyester production starts It rose 9.6% from before the holiday
From a demand side, the Spring Festival has returned to the market, and the recovery of polyester and terminal weaving has given strong support to the market. As of February 24, the polyester end operating rate has been raised to 88.82%, an increase of 9.6% from before the holiday. The rapid recovery of downstream equipment is affected by the “Celebrate the New Year in situ” policy on the one hand, and the inventory of polyester itself is at a low level. Driven by costs, the prices and profits of each product continue to rise, especially the profit of short fiber has exceeded 900. yuan/ton, so the operating rates of polyester and terminals are actively recovering, and the demand for PTA is well supported, which also lays the foundation for the increase in TA prices.
Forecast for the market outlook:
Taken together, crude oil and PX continue to have strong support, coupled with the The ester and terminal markets are actively resuming work. With multiple sets of TA equipment facing centralized maintenance, the contradiction between loose supply and demand has been eased. In addition, the spot market’s reluctance to sell is high, and the market’s bullish sentiment is highlighted amid tight spot liquidity. Generally speaking, with the dual benefits of cost and supply and demand dominating, it is difficult to see a downward trend in the short-term PTA market.
But what is worth noting in the future is: the results of the OPEC+ meeting on March 4, the time when the United States will officially lift sanctions on Iran, and the U.S. 1.9 trillion stimulus plan implementation. The above three aspects of concern are one negative, one negative, and one positive. Overall, oil prices are expected to move forward under pressure in March, with gains limited.
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