In the context of seasonal rigid demand for terminal orders, polyester load is expected to rebound slightly. PX and PTA will continue to be destocked in September, and PTA prices will be supported by this. However, with the expectation that new PX and PTA equipment will be put into production in the fourth quarter, PTA far-month contract prices will be suppressed.
Terminal load increases, polyester is significantly destocked
Since late August, the operations of texturing, weaving, printing and dyeing enterprises in Jiangsu and Zhejiang have gradually increased. On the one hand, as the high temperature in Jiangsu and Zhejiang has eased, the impact of power cuts has gradually subsided; on the other hand, seasonal demand is expected to rebound, and terminal weaving orders have improved month-on-month. Domestic sales and foreign trade orders are mainly small orders for autumn and winter seasonal knitted products. As of early September, the comprehensive operating rates of texturing, looms, and printing and dyeing in Jiangsu and Zhejiang had increased to 77%, 66%, and 72% respectively, which were 35 percentage points, 27 percentage points, and 24 percentage points higher than the lows in mid-to-early August. Seasonal rigid demand still exists, coupled with the oscillation and firmness of raw material prices, the overall market atmosphere has improved, some speculative demand has been released, and most terminal factories in Jiangsu and Zhejiang have increased their raw material stockings to 1-2 weeks.
Positive feedback from the terminal is transmitted upward, and polyester factories have month-end promotions. Since mid-August, polyester production and sales have experienced pulse-type increases many times. While polyester factories are reducing inventories and increasing loads, the cash flow of various polyester products has been squeezed to varying degrees. Except for bottle flakes and filament DTY, which are more profitable, other types of products have even been compressed to negative cash. flow status. The main reason is that PTA has reduced production and negative balances and dynamic destocking, and the spot price has been strong, squeezing downstream profit margins. In addition, the performance of terminal orders is divided, the demand for woven fabrics still needs to be improved, and fabric merchants’ profits on price-cutting orders are meager. Against this background, some polyester factories even sell raw material PTA to external parties. The increase in polyester load is relatively slow. It is estimated that the average load in September will reach 85%, which is slightly better than previous market expectations, but far lower than the same period in recent years.
PX supply is in short supply and PTA construction is limited
From March to May this year, Asia’s PX was intensively inspected. In addition, the demand for mixed aromatic oil blending in the United States increased in the second quarter, and the supply of PX was tight. my country’s PX imports continued to decline. In addition, there was less new domestic PX production capacity in the first three quarters, and PX was unplanned in September. Increased maintenance. Under the influence of multiple factors, domestic PX continued to be destocked, and PX social inventory fell by 930,000 tons from January to August. Currently, the Asian and domestic PX loads are 69.6% and 69.2% respectively, down 3.8 percentage points and 8.4 percentage points respectively from late August. Zhenhai Refining and Chemical’s 750,000-ton production capacity and Tianjin Petrochemical’s 390,000-ton production capacity have been shut down for maintenance at the end of August. Hainan Refining and Chemical’s 660,000-ton PX device still has maintenance plans in September. It is expected that PX supply will remain tight before the new device is launched.
On the one hand, the supply of PX is scarce in the near future, and PTA factories are unable to replenish raw materials; on the other hand, current market transactions are gradually shifting to November delivery, when new devices are expected to be put into production, which will increase the risk of PX in the long term, and factories will be cautious in purchasing. Raw materials in PTA factories continue to be in short supply, with raw material inventories in most factories falling to less than a week. As a result, the domestic PTA operating rate has been significantly restricted by the shortage of raw materials since mid-July and has been unable to increase. At present, the domestic PTA load has dropped to 67.2%, which is 4.2 percentage points lower than the corresponding load under the balance between supply and demand.
Although 238,000 tons of PTA were stored in storage due to large-scale polyester production cuts in July, PTA operations continued to decline as the supply of raw material PX was limited, while the polyester load gradually recovered, with 243,000 tons of PTA destocked in August. PTA spot prices and front-month contracts performed strongly, and basis and monthly differences continued to expand. The PX supply bottleneck still exists in September, and the PTA load will still be suppressed, while the polyester load is expected to continue to rebound slightly, and PTA is expected to be destocked slightly. Against the background of improved supply and demand margins, PTA prices are slightly resilient.
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