Although there were limited changes on the overnight cost side, polyester continued to fall in overnight trading, and the market sentiment was pessimistic. Negative feedback from the downstream has temporarily become a focus. On the 12th, the polyester chain collectively fell by more than 4%, with PTA leading the decline at 5,866 yuan. Ethylene glycol and staple fiber fell 4.36% and 3.94% respectively.
Sentiment in the commodity market has been low recently. The global epidemic situation has shown signs of deteriorating again. Lockdown measures have been upgraded in many areas of the country. At the same time, the industrial product market has been suffering from downward pressure on the economy. The overall industrial products market has declined, while the performance of oil prices is still significantly stronger than that of other industrial products. However, the cost-end support for polyester chains is not good. Because under the pessimistic mood, the market pays more attention to the negative feedback news downstream of the polyester chain.
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.
Zhongtai Futures believes that the recent trend of various polyester varieties has been significantly weaker than that of crude oil. The overall poor atmosphere of domestic commodities has brought a drag on it, and the industry itself has no obvious benefits. However, domestic macro data is improving. It is not recommended to pursue short positions at low prices. You can still consider going long on the price difference between MEG and PTA.
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