Why Is PTA Still Rising?

Since July 2016, the alliance effect has been spreading continuously in the polyester industry, from the earlier POY Quartet alliance to the FDY price increase and then to Huzhou joint downtime, this stage of polyester.

It can be said that there is no excitement.

Now it's a bad DTY industry. No, DTY manufacturers are going to launch soon.

It is reported that due to the difference in the price of polyester DTY, the competition is fierce. In order to develop the industry, in order to grow together, some domestic DTY giants, such as Sheng Hong, Heng Li, Heng Yi, Rong Sheng, Xin Fengming, Xing Hui and Tong Kun, held the market discussion meeting in Tongxiang on the morning of 27.

We temporarily put aside the correctness of the joint insurance system. At least in July this year, polyester filament was so popular that the current price increase trend has not weakened.

It is foreseeable that if there is no other special circumstances, the effect of DTY manufacturers re meeting will inevitably lead to a wave of polyester price rise.

However, when the polyester industry is soaring, the PTA, who has always been dominated by the industry chain, is stagnant. What are the reasons? And let the Xiaobian come slowly!

In June, the theme of the PTA market hype was the G20 summit, which led to the consumption of the downstream peak season, plus the overall strength of the goods and the support of PTA's low processing fees. Many factors resonate, and PTA prices rose in the off-season.

However, compared with black products, compared with PP, PE and other chemicals, PTA's rebound has been relatively weak.

The way to go after PTA is probably the most important factor that affects the industry's attention. It is also the driving force to decide the rise of the polyester market. The author, based on the basic analysis of PTA, explores the future direction of PTA.

First, the whole age is rising. Why can't PTA go up?

1, the production operation is not reduced, the device will be restarted at any time, and the expected price will be constrained by excess capacity.

Since 2011, the PTA industry has entered the high-speed expansion of production capacity. After 5 years of rapid growth, the domestic PTA capacity has increased from about 15000000 tons at the end of 2010 to nearly 47 million tons at the end of 2015, and about 3000000 tons of equipment have been put into operation and planned to be put into operation this year.

Contrary to the rapid increase in upstream supply, the terminal

Consumption is shrinking due to the loss of export orders and so on. The industrial chain terminal consumer market is hard to digest the rapidly increasing supply of raw materials, resulting in the problem of overcapacity in PTA. The industry operating rate has dropped rapidly from 90% to less than 70%, which has also caused the PTA price to continue to fall.

In the past two years, Far East petrochemical and Xiang Lu petrochemical giant production giant two, the domestic effective capacity decline temporarily relieved the supply side pressure, but the two sets of devices after the completion of the reorganization may be restarted. Rumor has it that in the second half of the year, Xiang Lu Petrochemical may retry the car.

In addition, besides Ji'nan Hao Hao, Liaoyang petrochemical, Peng Wei petrochemical, Yisheng Ningbo plant 2, BP Zhuhai 1, other devices have maintained normal production, and the original long term shutdown of Jialong petrochemical company has resumed this year.

We can see that the backward rate of elimination is slow. PTA industry has a long way to go to achieve the goal of healthy development through the elimination of backward production capacity.

Therefore, the price of PTA will continue to be constrained by excess capacity, showing a bottom oscillation pattern.

2, equivalent to half a month of domestic warehouse receipts to suppress PTA spot weakness

Under such circumstances, many PTA enterprises and traders will sell their futures in the futures market when the futures price rises to a certain height.

Since March, as PTA prices have bottomed out, enterprises have begun to deliver goods in the futures market, and PTA warehouse receipts have increased dramatically.

By the end of July 22nd, the warehouse receipts for PTA futures of Zhengzhou commercial bank reached 186046 hands, plus 9773 hands effective forecasts, the potential delivery volume reached 979095 tons, which is equivalent to half a month's domestic output.

Under the suppression of huge warehouse receipts, if PTA futures prices rise sharply, speculative customers will be exposed to high risk of receiving goods.

Therefore, the PTA1609 contract will run around the spot price, and spot price has become the most important factor affecting the PTA futures trend in the near future.

Because of the large number of potential industry short funds in the market, PTA futures have been on the spot slightly since the beginning of this year, but the highest is only 200 yuan / ton.

As of July 15th, the figure was only 91 yuan / ton.

At present, the current price difference is at a normal level, and futures do not need to repair the basis.

As a result, the spot market is also weaker.

Two, if the market continues to erupt, can we pull the "stubborn cow" of PTA?

1, the first consideration is whether PTA will fall sharply.

I believe that even if the fall, the space is very limited.

Since July, the price of PTA has fallen, and the processing fee has been compressed. At present, the price of the product is only 200 - 300 yuan / ton.

Affected by the fall in PTA prices, the operating conditions of PTA production enterprises have continued to deteriorate and losses have intensified.

Under the premise of constant cost, the price limit of PTA is the processing fee.

In fact, once PTA's processing fee is too low, PTA production enterprises will limit production and price.

To judge whether PTA prices continue to fall, we only need to judge the cost situation.

Judging from the current situation, the price difference between naphtha and PX has reached 400 US dollars / ton, and profits have stimulated PX enterprises to actively produce.

However, late PX maintenance is relatively intensive, and supply will decline.

Therefore, it is expected that the cost side of PTA will maintain the status quo, or even increase slightly.

Under the premise that the spot price is stable, subject to lower processing fees, the price of PTA is also very limited.

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2, now that we can't fall, what are the key factors that determine the PTA market?

Upstream raw material cost support

In theory, the PTA processing fee continues to be limited, the PTA price center of gravity is closely related to the price of raw materials. Only the price of raw materials falls, and the center of the PTA cost is moved down, and the new downside space may be released.

At present, we also need to pay attention to the August PX ACP price and raw material end performance to be released at the end of the month.

Downstream polyester G20 performance

It is understood that during the G20 summit, the polyester industry cut down production and production capacity is more, so polyester enterprises maintain high opening rate before that, and make up for the loss of production that may result from limited production.

At the same time, polyester sales are also better, the state of enterprise inventory is relatively ideal. In mid July, the sale of polyester products was triggered by the news of price increase. We can see that the downstream enterprises have the need to bargain and store up goods, so as to prevent the price rise that may result from tight supply after the limited production.

On the whole, the G20 summit made the consumption of PTA and polyester products ahead of schedule. However, the demand for overdraft peak season has become a hidden danger of the lack of demand for raw materials in the post market period. It is recommended to pay attention to the supply and demand performance of polyester industry after the G20 summit.

When will huge warehouse bills be digested?

PTA's main contract is close to delivery, and it still maintains a high position. Taking into account the large number of registered warehouse receipts and short strength, PTA futures price is hard to form an effective rise.

The PTA spot market follows the volatility of the futures market. The digestion of PTA warehouse receipts at the later stage is the key factor to decide whether the market can go up.

To sum up, in the short term, the PTA processing fee is lower than the supporting price, and the polyester maintain high opening rate will continue to benefit PTA.

However, the Hon Bang petrochemical plant for pre parking has been restarted. Last week, the constant force device for temporary parking has been restarted yesterday. The supply pressure of PTA can not be ignored. The end of August to the beginning of September is still bad.

In a word, I believe that the price decline of PTA is not easy to rise or difficult.