On the 8th, the overall risk appetite of the market rebounded. After raw material prices stabilized, chemical products with stronger supply and demand phases took the lead in rebounding. On the 9th, PTA and short fiber still maintained high levels and led the gains. PTA reported 5,824 yuan, up 2.75%; short fiber rose 3.17%.
After a week of continuous decline, international oil prices have stabilized. Last Friday’s strong non-agricultural data increased expectations of interest rate hikes and also weakened expectations of economic recession. Judging from market performance, it is temporarily more inclined to a rebound in risk appetite. However, there are doubts about the weak demand in the crude oil market.
As of last week, PTA processing fees remained low. Due to intensifying losses, 27.35 million ton devices, including Fuhai Chuang’s 4.5 million ton device and Yisheng’s three 10-million-ton devices, were shut down for maintenance or load reduction in July. Domestic PTA operating load continues to be less than 70%. Although most of the equipment that was overhauled in July resumed production or operated at full capacity from the end of July to early August. However, in August, Hengli Petrochemical’s 2.2 million tons unit and other equipment were overhauled, and there was no expectation of a significant recovery in the start of PTA construction.
At present, domestic polyester inventories are high, and companies are under great pressure to destock. Since terminal demand has not been followed up, polyester companies have been forced to cut prices to remove inventory. This has led to continued compression of polyester company profits. In addition to bottle flakes and industrial yarns, polyester filaments and staple fibers are basically in a break-even state. Under such circumstances, domestic polyester companies are less motivated to produce, and Jiangsu and Zhejiang have issued orderly power consumption policies for some textile bases to cope with peak power shortages. The polyester end still has insufficient support for the upstream. However, as the weather turns cooler in late August, if consumption can pick up, the impact on the industrial chain may change from a drag to a neutral one.
The rebound of short fiber is mainly due to the strengthening of raw materials, while the fundamentals show a trend of increasing supply and demand and decreasing demand. After mid-July, the downstream yarn procurement capacity was weak, and its own finished product inventory continued to accumulate. At present, the output of short fiber has been at a high level in the past three years, and is showing a reverse trend with 2021. From the later production plan, the supply increase is obviously expected.
Looking at the longer cycle, Xie Wen, a senior analyst at Wuchan Zhongda Futures, said that the PX and PTA corresponding to the 2301 contract are under great pressure to put into production, and it is difficult for PTA demand to improve beyond expectations. It is expected that PTA accumulation pressure will increase. In addition, there is a high probability that the range of forward crude oil will move downward, and the trend of PTA in the far month may be under pressure.
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