On the supply side, equipment maintenance is increasing; on the demand side, domestic textile consumption is expected to improve strongly, foreign trade orders are also expected to recover, PTA fundamentals are generally improving, and prices will continue to rise.
The picture shows the changes in polyester inventory ( Unit: days)
Boosted by the rebound in crude oil prices and the recovery of domestic terminal demand, PTA prices have shown an upward trend since May. The author believes that as the crude oil market releases a bottoming signal and it enters a destocking cycle, PTA’s rise is expected to continue.
The crude oil glut problem has eased
In May, the pace of economic recovery in Europe and the United States accelerated. At present, all 50 states in the United States have restarted economic activities, and the rebound in terminal demand has promoted the recovery of U.S. crude oil refinery operations. EIA data shows that U.S. commercial crude oil inventories were 526.5 million barrels in the week ended May 15, a decrease of 4.982 million barrels from the previous week. At the same time, crude oil inventories in the Cushing area decreased significantly, falling by 5.587 million barrels month-on-month. The global crude oil market oversupply and crude oil storage crisis have eased.
The latest OPEC monthly report shows that the organization is relatively optimistic, believing that the worst period of the oil crisis has passed, and seeing signs of recovery in the world’s major economies, which is good for oil product demand. With marginal improvements in supply and demand, the mid- to long-term bottom of crude oil prices will become clearer.
In addition, since the end of April, the price of PX has rebounded by US$57/ton, and the cost of PTA has subsequently increased by 190 yuan/ton, which is close to the increase in PTA spot prices. Currently, the price difference between PX and naphtha is at a low level, which has a certain supporting effect on PTA prices under the expectation of rising oil prices.
An unexpected increase in maintenance equipment
PX prices have risen, and polyester prices have also risen. The current average spot price is 8.3% higher than the end of April. Prices have increased at both the cost end and the finished product end, with PTA processing profits increasing to 750 yuan/ton, an increase of 330 yuan/ton from the low in late February. Processing profits are good. Since April, the operating rate of PTA equipment has been at a high level of more than 90%. However, recently, accidental maintenance of PTA equipment has increased. On the evening of May 19, Hanbang Petrochemical’s 2.2 million tons/year plant was shut down for maintenance, Shanghai Petrochemical’s 400,000 tons/year plant, Zhejiang Liwan’s polyester plant with 700,000 tons/year capacity, and Hengli’s 2.5 million tons plant. /year’s device is also in a parked state. According to CCF statistics, as of mid-May, the domestic PTA device maintenance capacity was 7.1 million tons/year, accounting for 13.6% of the total production capacity. In addition, starting from June, units with a production capacity of 2 million tons/year in Hainan Yisheng and 1.2 million tons/year in Xinjiang Zhongtai also have maintenance plans, which are expected to drag down the operating rate of PTA equipment by 9 percentage points.
Terminal demand gradually recovers
my country’s epidemic control has been effective. By mid-May, except for a few areas such as Jilin, the rest of the country was already in a state of emergency. Low risk level. Shopping malls and supermarkets have fully resumed operations, and various regions have frequently introduced policies to stimulate consumption, boosting the recovery of end-use textile demand. Overseas, the number of new COVID-19 cases in many European and American countries has mostly reached a plateau. Starting this month, most countries have gradually lifted blockade measures, and the gradual resumption of work has brought about an improvement in expectations for foreign trade orders. Textile foreign trade orders are polarized. Export sales of masks, protective clothing, etc. are driven by the overseas epidemic, but the scale is small. Exports of conventional textile yarn and clothing foreign trade orders fell by 15% in the first quarter. With the partial restart of the European and American economies, foreign trade Orders are expected to resume in July.
Polyester transactions have improved
Under expectations of recovery in domestic clothing and textile demand and improvement in European and American foreign trade orders, the operating rate of looms in Jiangsu and Zhejiang is at In mid-May, it rebounded to 66.8%, and the polyester device operating rate rebounded to 79.04%. At the same time, polyester manufacturers offer discounts and promotions, and weaving and texturing manufacturers increase their raw material purchases. Stock replenishment actions are common. Polyester transactions have a small peak around May Day, and the production and sales rate once reached 175%, boosting the decline in polyester end stocks. CCF data shows that as of May 15, POY inventory was 16.88 days, FDY inventory was 15.44 days, and DTY inventory was 23.64 days, down 14.4 days, 12.5 days, and 9.6 days respectively from the high point in March. In terms of weaving inventory, the inventory of gray fabrics in Shengze area is 41 days, down two days from the previous high.
In summary, PTA supply-side equipment maintenance has increased, and the inventory accumulation has declined; the demand side is expected to gradually improve under the expectation of improvement in domestic clothing and textile consumption and the recovery of foreign trade orders. The situation is picking up and is being transmitted to the upstream of the industrial chain. Driven by favorable conditions on both the supply and demand sides, PTA prices still have room to rise. </p
