In May, PTA market prices continued to be high, but the increase also slowed down significantly compared to April. As of May 11, the spot price of PTA was around 4,750 yuan/ton, an increase of 9.70% from the price at the beginning of April, but a narrow decline from the end of April, with a decrease of 0.21%; although the PTA market price has remained at a high level position, but there will be greater pressure to continue to break upward. The main factors affecting the PTA market changes in May are as follows:
1. Cost
First of all, in terms of crude oil, the one-year epic production reduction project will gradually start to increase production. From May to July, OPEC+ will gradually increase its production capacity by 2 million barrels per day, which is the same as OPEC’s production in March. In comparison, production will increase by 1.37 million barrels per day in May, 270,000 barrels per day in June, and 360,000 barrels per day in July. Most of the increase will occur in May.
However, under the severe epidemic situation in India, the market has reduced India’s crude oil demand by 500,000 barrels per day. The increase in production and the decline in Indian demand have resulted in nearly 1.8 million barrels per day. The demand gap has been released, and it is still unknown whether the market can fully bear the variable of 1.8 million barrels per day in May. Therefore, in the absence of unexpected emergencies, the support for crude oil market prices to rise to a certain new height is somewhat insufficient.
At the same time, with the restart and return of domestic Qingdao Lidong 1 million tons/year and Fuhai Chuang 800,000 tons/year PX devices at the end of April, the domestic supply of PX has increased significantly, and PX has From the partial balance of supply and demand to the accumulated storage pattern, while the absolute price trend of PX is mainly based on crude oil, changes in the crude oil market are particularly important.
2. Supply side
The production of PTA is based on PX Raw materials and acetic acid as auxiliary materials are produced through a series of operations such as catalytic oxidation. Previously, due to reasons such as less acetic acid materials and low prices, the cost of acetic acid as a raw material was not calculated separately; but starting from 2021, due to frequent equipment maintenance With the steady growth of development and downstream demand, the price of acetic acid continues to break upward. In April, the price of acetic acid in East China once rose to 8,400 yuan/ton. Based on the consumption of 40 kilograms of acetic acid in 1 ton of PTA, the PTA production cost is about 336 yuan/ton, while the average PTA processing fee in April was 386.65 yuan/ton. After deducting the theoretical cost of auxiliary acetic acid and packaging, the remaining PTA processing fee is limited and does not include Manual depreciation and the like.
In other words, as the price of the excipient acetic acid rises, the processing profits of PTA are eroded, and the industry’s production profits are mostly faced with losses. Therefore, PTA equipment maintenance and production cuts continued to increase from March to April, and the overall market started to decline sharply. After May, as PX price growth slowed down, acetic acid prices began to fall, and PTA market prices remained high, industry processing fees increased significantly, exceeding 500 yuan/ton, reaching a high level during the year.
The increase in processing fees will increase the enthusiasm of PTA factories for production. At the same time, PTA has had multiple sets of equipment undergoing centralized maintenance from March to April. In May, the maintenance of large equipment itself will be partial. In addition, if new equipment is expected to be put into operation, if the high processing fees can continue, it is not ruled out that small and medium-sized enterprises that have stopped in the early stage may resume production, and the market supply may rise again.
3. Demand
The load of downstream polyester enterprises has always been relatively high Stable. Since the active resumption of work during the Spring Festival, the load of polyester factories has basically remained at a high level of more than 90%. However, due to the recurrence of foreign epidemics in the terminal weaving market, the number of new order negotiations is relatively limited. Although after the outbreak of the epidemic in India, some orders returned to In the Chinese market, the demand for polyester products has always been difficult to significantly increase. In order to alleviate the inventory pressure of enterprises, downstream polyester has experienced several sales promotions and sales since the end of March. Although the inventory pressure has been released to a certain extent, the inventory growth trend has hardly slowed down.
Based on the above factors, the cost-side crude oil market has great uncertainty. From the perspective of PTA’s own supply and demand, the pace of destocking may continue in May, but the month-on-month decrease is obvious. Weakening, and at the same time facing the expectation of accumulating inventory again after the new device is put into production.
At present, the PTA market has begun to slow down. Due to the subsequent increase in processing fees, it is not ruled out that the PTA spot market price is expected to fall. However, the reduction in contract supply in May has caused the spot market circulation to be biased. Tight supply also provides certain support for the market. It is expected that the PTA market price range in May will be between 4,600-4,850 yuan/ton. Follow-up changes in the crude oil market still need to be paid attention to. </p
