On June 29, news came out in the market that the major polyester manufacturers had jointly cut production more than expected, causing the main players in the polyester chain to give up their previous rebound gains. On June 30, PTA fell more than 2% at the beginning of the session, and then rebounded to reduce the decline, while B Diols led the way up by more than 2%, closing at 4,553 yuan.
With the restart of PTA maintenance equipment in early June, PTA production increased. However, due to the drag of the terminal, it is difficult to increase the polyester load, and the contradiction between supply and demand has intensified. The market’s news of joint production cuts by polyester factories has once again attracted market attention. At present, driven by the production cuts of several leading companies, there are still downward expectations for the start of polyester production in the later period. However, due to the fact that the specific implementation plan of the production cuts has not been determined and there are still some small and medium-sized enterprises in the early stage of maintenance. There are expectations for resumption of work, which makes the market’s expectations for PTA’s future supply and demand tend to be looser.
The current PTA spot price is relatively strong. This is because after Fuhaichuang announced its maintenance plan recently, the market’s reluctance to sell has intensified. At the same time, as July delivery approaches, some traders have a need to buy spot for delivery, which makes PTA spot buying more active. In previous years, July and August were the months when extreme weather such as typhoons were more concentrated. The market was worried that logistics obstruction would lead to an increase in PTA spot tightness, so buying was also more active.
However, the spot price of ethylene glycol is weak. Due to the continuous accumulation of inventory in the main port, it has reached a new high in 20 months. As a result, the domestic spot price of ethylene glycol has quickly fallen back to below 4,500 yuan/ton. The previous rebound of ethylene glycol was also the smallest. However, today’s increase is supplementary.
From July to August, the maintenance and restart of ethylene glycol storage equipment are parallel. According to current statistics, due to the late-stage maintenance of coal chemical plants, because some devices have not been operating at full capacity, and the restart of some early-stage maintenance equipment is expected, Longzhong Information predicts a slight growth in the supply side next month. However, polyester factories have relatively abundant raw material inventories, and factories have recently been less enthusiastic about buying goods. As a result, it has been difficult to improve the delivery level of ethylene glycol ports, and it will still take time to clear the inventory.
Longzhong Information said that the fundamental negative factors have basically been released. In the later period, the supply side has gradually begun to increase its maintenance due to cost/device factors, and the current prices of coal, crude oil, and naphtha have basically stabilized and rebounded. In addition, new production equipment will be put into operation before 2009. The probability is limited, so with limited new negative news, ethylene glycol continues to shrink.
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