Affected by the improved supply and demand pattern and low valuations, PTA futures prices have rebounded slightly since mid-July and have now rebounded to the important pressure level of 6,000 yuan/ton corresponding to the golden section of 0.618. At present, PTA processing fees are low, and the supply and demand structure has improved as terminal demand improves. Under this circumstance, PTA’s short-term strong pattern is expected to continue.
Start-up load continues to decline
As of August 5, the processing fee of domestic PTA manufacturers was 470 yuan/ton, and the unit loss reached 130 yuan. The operating conditions of the production enterprises are poor. Due to worsening losses, 27.35 million tons of units, including Fuhaichuang’s 4.5 million tons unit and Yisheng’s three 10-million-ton units, were shut down for maintenance or load reduction in July. Domestic PTA start-up load fell back to 67.36%, and the overall market supply dropped by 1.47% compared with the same period last year.
Overall, most of the devices that were overhauled in July resumed production or operated at full capacity from the end of July to early August. In August, in addition to long-term shutdown devices, Hengli Petrochemical’s 2.2 million ton device, Jiaxing Petrochemical’s 1.5 million ton device, and Zhuhai BP’s 1.25 million ton device were overhauled. The operating load of PTA devices continued to fall. Considering the overall poor operating conditions of domestic PTAs, the possibility of extending the maintenance of the currently overhauled devices will not be ruled out, and it will also force new devices to continue to be overhauled. Therefore, PTA prices still need to be repaired upward to repair low processing fees.
In addition, as of August 4, domestic PTA factory inventory was 4.23 days, down 0.05 days from last week and up 0.63 days year-on-year. The PTA raw material inventory of downstream polyester enterprises is 6.81 days, a decrease of 0.5 days from last week and a decrease of 0.67 days year-on-year. PTA social inventory is approximately 2.4937 million tons, a decrease of 69,500 tons from last week and a month-on-month decrease of 2.71%. At present, domestic PTA inventory is in a downward trend, and centralized maintenance of PTA equipment is expected to accelerate the destocking process, which will help alleviate the oversupply of PTA.
Downstream demand improved slightly
At present, domestic polyester inventories are high, and companies are under great pressure to destock. As of August 4, domestic polyester filament POY inventory was 35.4 days, an increase of 19.9 days from the same period last year, a year-on-year increase of 128.39%; polyester filament FDY inventory was 34.5 days, an increase of 12.7 days from the same period last year, a year-on-year increase of 58.26%; polyester filament Filament DTY inventory is 42.3 days, an increase of 15.5 days compared with the same period last year, and a year-on-year increase of 57.84%. Not only is inventory pressure huge, but because terminal demand has not been followed up, polyester companies are forced to cut prices to remove inventory. This has led to continued compression of polyester company profits. Except for bottle flakes and industrial yarns, polyester filaments and staple fibers are basically in profit or loss. Balanced state. Under this circumstance, the production enthusiasm of domestic polyester enterprises has declined, and the operating load has also declined.
At the same time, affected by public health events and declining textile orders, the domestic terminal weaving industry performed poorly, which is an important reason for the weak prices in the chemical fiber industry chain. As of August 5, the average operating load of the domestic terminal weaving industry was only 53%, a decrease of 26 percentage points from the same period last year. At present, domestic autumn clothing and winter equipment shipments have picked up compared with the previous period, and domestic weaving load has also rebounded in the short term, which has played a supporting role in the rebound of chemical fiber prices. However, it is currently the traditional off-season for the chemical fiber industry, and it is difficult for consumption to rebound substantially. The improvement in terminal demand is limited, and it is difficult to provide sustained momentum for the rebound in PTA prices.
To sum up, the current PTA processing fee is at a low level. From a valuation perspective, the PTA price is suspected of being underestimated. At the same time, PTA’s operating load dropped and inventories fell. However, the downstream polyester and weaving industry operations rebounded slightly, and the improvement in supply and demand structure also helped PTA prices rebound. Based on two reasons: low valuation and improvement in supply and demand structure, short-term PTA prices will show a strong trend, but it is still a rebound market with valuation repair, and the height of the rebound is relatively limited.