With an intraday increase of more than 3%, is PTA futures expected to “take off” again?

Entering March, PTA futures “took off” again. Yesterday, PTA futures prices rose by more than 3% during the day, with the highest intraday price of 5,748 yuan/ton also …

Entering March, PTA futures “took off” again. Yesterday, PTA futures prices rose by more than 3% during the day, with the highest intraday price of 5,748 yuan/ton also hitting a new high since February 3.

A reporter from Futures Daily learned that the overall PTA market showed a “V”-shaped trend in February. In this regard, Shi Yingfeng, PTA analyst at Longzhong Information, said that the supply and demand of market transactions in the first half of February were weak, the supply increase of PX and PTA was large, and the recovery of demand was far slower than expected. Under the dual pressure of cost and supply and demand, prices continued to fall. to 5,400 yuan/ton; in the middle of the month, as demand gradually improved, the decline in PTA stimulated some rigid needs to focus on replenishment, and the market rebounded from a low level. At present, the center of gravity of PTA prices has risen to around 5,700 yuan/ton.

“PTA’s current rise is an expected recovery valuation. Due to the dual impact of the increase in PTA’s circulating inventory and poor downstream terminal orders in mid-February, the price comparison between PTA and PX (PTA processing fee) has been extremely low for a long time. Companies generally consider production cuts and other measures to support prices when processing fees are low for 2-3 weeks.” Dadi Futures analyst Ma Junyi said that under extremely low valuations and signs of accumulated inventory, companies take production cuts, which in turn increases supply and demand. The return to balance is the main reason for this round of rise.

In fact, in the early market research, reporters from Futures Daily also learned that in the face of the high production of PTA, the processing gap of PTA companies had fallen to a low level in mid-February, and the operating pressure of companies has increased. In the future, industry competition will continue , under the pressure of continued losses, companies will also choose to spontaneously reduce production.

According to Ma Junyi, the cash flow processing costs of PTA production companies include auxiliary materials (acetic acid + others), power (industrial water + electricity + steam + desalted water), workshop expenses (labor + maintenance), and three expenses (finance + management + sales) , packaging, etc. Generally speaking, there are several processing fee gradients according to the technical level of the device. At present, the overall processing cost of the latest device can be controlled below 400 yuan/ton or even 350 yuan/ton. However, the overall processing fee in February has been compressed to 300 yuan for a long time. / ton or even as low as around 60 yuan / ton. Under such processing fees, companies that have been running for a long time will inevitably suffer losses.

Usually, companies will observe for 2-3 weeks. When the company is near the marginal processing cost for a long time, the company will consider reducing the load or suspending production.

“The continued accumulation of inventory in January and February has resulted in low processing fees, which will prompt companies to overhaul or suspend production, the industry’s operating load will decrease, spot output will tighten, the supply and demand situation will improve, and profits will be restored.” Shenwan Futures analyst Yuan Wei express.

According to CCF senior analyst Shen Yinjiao, the average PTA processing fee in February was 236 yuan/ton (based on foreign exchange selling price), which is far lower than the industry’s average processing cost. However, considering the upstream and downstream supporting conditions and contract execution, there has been no processing fee for the time being. Due to cost issues, large-scale production cuts occurred. “As fundamentals improve in March, processing fees are expected to gradually recover.” Shen Yinjiao said.

The current PTA spot processing fee is 240 yuan/ton. The entire industry is suffering losses, companies are less motivated to start operations, and there is also news in the market that some PTA units have been shut down and planned to reduce loads. On Tuesday, news of the maintenance of several PTA units boosted the market. In particular, Yisheng Hua 1# and 2# units with a total of 6 million tons began to reduce their overall load by 50% on March 1. This is an unexpected reduction in the inventory of existing units.

“As soon as the news came out, the market re-weighed supply and demand, stockholders offered higher prices, buyers filled short positions and increased volume. The overall atmosphere of the industry chain improved, and prices rose in response.” Shi Yingfeng said.

“PTA unplanned maintenance increased, and the 1 million-ton PTA device was unexpectedly short-term. The 6 million-ton plan of Yisheng Hua was reduced to nearly 50% in early March. The Hengli 1-line plan started maintenance for 30 days from 3.3, and the operating rate dropped to 71.6 recently. %, and the subsequent low is estimated to be around 69-70%.” Shen Yinjiao said that from the perspective of supply and demand, due to the acceptable performance of polyester and exports, about 200,000 tons are expected to be destocked in March, supporting the strengthening of PTA prices. ”

Similarly, in Yuan Wei’s view, driven by low processing fees, unexpected equipment maintenance may lead to the possibility of the operating rate falling below 70%. “Dahua 375 plans to reduce the load for 5-7 days; Sichuan Energy Investment will temporarily stop for 7-10 days on the 27th, Zhongtai will restart at the end of the month, and Hengli 1# plans to stop, involving more than 5 million tons of production capacity, accounting for PTA’s February production capacity The base is 7.27%.”

On the one hand, there was an unexpected increase in maintenance of supply-side equipment; on the other hand, the burden on downstream terminals exceeded market expectations.

According to CCF senior analyst He Lingli, as of the end of February, the startup levels of texturing and weaving terminals in Jiangsu and Zhejiang have recovered and exceeded the same period in previous years, with texturing at 92% and weaving at 75%.

“On the one hand, raw materials are in stock before the Spring Festival, and the progress of terminal startup and repair after the holiday is acceptable. In addition, the Spring Festival is early, and the resumption of work nearly one month after the holiday is already at a phased high; on the other hand, with favorable policies and strong recovery expectations, “There has been no major fluctuation in the raw material end after the holiday, and terminal stocking for spring and summer orders has further pushed up the market’s operating rate,” He Lingli said.

Judging from the data, the burden on downstream polyester terminals has indeed returned to a high level, and the year-on-year improvement in polyester production and sales has driven a wave of destocking of polyester products. “The overall resumption of terminal production is still a trend of accepting some small orders and preparing for the peak season, which has improved month-on-month.” Ma Junyi said.

Some market participants also said that yesterday’s sharp rise in PTA was not only driven by fundamentals but also by macro factors.Cooperation in all aspects. China’s PMI in February was 52.6%, higher than the critical point. China’s improving economic prospects have boosted market risk appetite, and the stock market and commodities have collectively gone red.

“At present, the improvement of PTA fundamentals and the need for low-level processing fee repairs have boosted the price of PTA.” Shen Yinjiao believes that in the medium term, PX equipment maintenance will be concentrated in the second quarter, and some PTA equipment will follow the maintenance, and the operating rate will be lowered. , temporary destocking expectations are on hold, but considering that terminal consumption is still far behind expectations, whether it can be followed up in the future still needs to be verified. There are still variables in the polyester load in the second half of the second quarter, and the extent of destocking will be adjusted depending on the fluctuations in upstream and downstream loads. “If demand follows up by then, there will still be some support for PTA.” Shen Yinjiao said.

In Shi Yingfeng’s view, the current PTA market transactions are focused on the shrinkage of the supply side. With China’s economic data being good and polyester demand relatively stable, the mismatch between market supply and demand has supported the current market, but terminal consumption has not yet Effective dredging, the industrial chain’s large-scale production pattern has not changed, and the upward pressure on PTA prices still exists, which continues to constrain the upward trend of futures. In the later stage, we need to pay attention to the situation that demand exceeds expectations.

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Author: clsrich