Introduction: After the Dragon Boat Festival holiday, crude oil prices continued to rise during the holiday. On June 6, the WTI price reached a maximum of 120.99 US dollars/barrel, and on the 7th, the PX price soared to 1,485 US dollars/ton CFR Taiwan/China. Boosted by the cost side, the chemical sector opened higher and strengthened on the first day after the holiday, with PTA and short fiber leading the gains. The PTA market continued to rise in the following days. As of June 8, PTA’s main contract 2209 reached a maximum of 7,654 yuan, an increase of 980 yuan from the settlement price of 6,674 yuan on June 2, an increase of 14.68%.
Data source: Jin Lianchuang
Looking at the current market:
Oil prices and PX have risen strongly, and cost-side support remains strong
Although the OPEC meeting agreed to increase production, and the increase in production was about 50% higher than the previous growth plan, it still did not satisfy the market, especially shortly after the meeting, the U.S. EIA inventory data once again exceeded expectations. With the arrival of the peak consumption season, concerns about tight supply of PX have once again dominated the market. In addition, under the warmer general environment, both the upstream and downstream markets of PX have experienced sharp rises. Business confidence is high, and the offers are firm. The short-term market may consolidate strongly, which will drive the rise of PTA to a certain extent.
PTA operating rate remains at 69.55%, supply-side support is solid
On June 6, the domestic PTA operating rate remained at 69.55%, which is a low operating rate in 2022 and 6.87% lower than the same period last year. Ningbo Taiwan Chemical Plant restarted on June 7, Dushan Energy Plant restarted on June 8, and the operating rate rebounded to 73.12%. At present, PTA maintenance equipment is relatively concentrated, and PTA supply is still in a tight state. Therefore, the supply boosts the market and supports the strengthening of PTA prices.
Downstream polyester operating rate rebounded, but orders fell compared with the same period in previous years
Recently, the operating rate of downstream polyester has rebounded slightly, and the current operating rate remains at 82.60%. The production and sales of polyester factories have improved slightly due to the strengthening of costs, but the overall profit level is still not ideal. Except for polyester bottle flakes, most other products are in a state of loss, which to a certain extent suppresses the recovery of factory operations. On the terminal side, the weaving operating rate has returned to normal. At present, a small number of European and American clothing orders in the second half of the year and new orders for home textiles are mainly. Domestic autumn clothing orders have been placed, but the quantity is limited. The overall market orders have declined significantly compared with the same period in previous years.
in summary
The current supply and demand structure of PTA has not changed significantly, and its market dominance is limited. The main logic of the recent rise is still strongly supported by the cost side. In the short term, the bullish atmosphere in the market is still strong, and coupled with the strong high level of crude oil, PTA prices are expected to continue to rise in the near future, and the focus is on the demand for oil adjustment.
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