International oil prices plunged sharply overnight, with Brent and WTI crude oil futures both falling by more than 6%. Driven by the cost side, combined with weak terminal demand, polyester factories were forced to further reduce production. The domestic polyester chain continued to plummet, and the PTA was closed on the 13th. The price limit fell to 5,570 yuan. Staple fiber fell 5.45%, and ethylene glycol fell 1.36%.
The current oil price is more sensitive to bad news, which is significantly different from the performance in the previous bull market atmosphere. It is becoming easier for international oil prices to fall below the US$100 mark. The market is highly wary of possible changes after Biden’s trip to the Middle East. Although OPEC’s monthly report emphasizes that supply will still be tight next year, market risk appetite is at a low level amid the continued decline of commodities. , limiting investors’ willingness to do more.
PTA supply has rebounded from low levels, demand has declined, the margin of supply and demand has weakened, and inventory is expected to accumulate. In terms of supply, Hengli Petrochemical Phase 5 has recently been overhauled, Yisheng Ningbo Phase 4 has restarted, new material loads have returned to normal operation, and Energy Investment and Luoyang Petrochemical are restarting. Since the current PTA spot processing fee is more than 500 yuan/ton, there is a strong willingness to restart the device. However, the short-term PTA basis is still relatively strong, and the main contract basis is around 500 yuan/ton, which supports the market price to a certain extent.
EG’s own supply and demand logic is poor and has become an empty product. However, ethylene glycol plants have suffered losses for nearly 7-8 months. As prices continue to decline, the number of production cuts due to efficiency reasons has increased. The supply side has shrunk significantly, and the operating rate has dropped to below 50%. At the same time, many sets of equipment have recently announced maintenance plans, and the supply and demand pattern is expected to ease in stages, making the market relatively resilient.
It’s hard to expect anything in terms of demand. The raw material inventory of polyester factories is relatively abundant. Recently, factories have been less enthusiastic about buying goods and want to increase joint production reduction efforts. At present, several major polyester yarn manufacturers have implemented production cuts one after another, and in the off-season, the terminal weaving operating rate has not improved, and the demand side has exerted a drag on the raw materials PTA and ethylene glycol. Recently, polyester companies in the middle and lower reaches of Zhejiang and downstream textile printing and dyeing companies plan to reduce their load due to power cuts. Currently, several leading polyester filament companies plan to reduce their load by 10% for maintenance based on the original load.
In terms of short fiber, the current cost end is a big drag on the cost of polyester; coupled with the weak downstream demand in July, the polyester staple fiber market lacks favorable conditions, and the price continues to be weak; however, the current spot shipments are still tight, coupled with the recent large decline. , pay attention to the replenishment sentiment in the middle and lower reaches of the market when the market price drops to the low point in the stage.
Guotai Junan Futures believes that under the current price where the basis continues to be high, it is not recommended to pursue short positions in the short term. The mid-term trend of PTA is weak, and the operation idea of a subsequent rebound short is maintained.
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