In the past two days, amid the heavy decline in crude oil, the energy and chemical sector has been among the top losers. Crude oil is the source of raw materials for chemicals. The decline in oil prices and the decline in chemical products are the logic of the decline caused by cost collapse. Consumption declined due to the epidemic in the first half of the year, and the impact of the epidemic weakened in the second half of the year. However, consumption has not yet improved, which is also a negative factor for market transactions. Market participants generally believe that the trading logic that dominates the energy sector has gradually shifted from early cost support to negative demand feedback. This change in logic has made the overall energy sector trend weaker.
The reporter learned that during the sharp decline in crude oil prices, chemical product prices were also falling, but the magnitude of the decline was different for different chemical products, and product profits also fluctuated in the short term.
Zijin Tianfeng Futures analyst Liu Siqi told reporters that during the sharp decline in crude oil, the PTA processing fee of the polyester industry chain was in a state of recovery. With the decline in crude oil prices, the price focus of industrial chain products PX and PTA has moved downwards. The PTA market structure is acceptable. Mainstream suppliers have stock control behavior. Spot circulation is tight. The price decline is smaller than that of crude oil. The PTA processing fee has been restored to 500. Yuan/ton is above the level.
“Currently, although the spot processing fee of PTA reaches 520 yuan/ton, the disk processing fee is only 140 yuan/ton. Some PTA manufacturers have increased the spot quotation of PTA, and the spot premium has reached 380 yuan/ton.” China World Trade Futures Analyst Chen Sheng told reporters that PTA’s circulating stock is tight, and most traders’ inventories have been emptied. Under the high basis difference, the PTA market transactions are weak, with fewer factory purchases. Some polyester manufacturers have also recently sold inventory of raw materials in the market.
“The price difference between PTA and Brent crude oil has expanded in the past two days, but the main reason is that the profits of upstream PX and naphtha have expanded during the plummeting oil prices. Due to the large decline in PTA, the processing difference has actually declined.” Pang Chunyan, an analyst at Tou’anxin Futures, said that we have not yet seen any obvious repairs of poor processing of PTA, but the spot supply in Jiangsu has been tight recently, and the regional basis performance of PTA is relatively strong. Due to the maintenance of two large equipment in the later period, it is expected that the situation of regional tension in PTA will continue.
According to industry insiders, if the PTA market wants to get out of the downturn, the contraction effect of supply alone is not obvious and will not be sustainable.
“In the process of supply contraction, if PTA prices strengthen, it will inevitably lead to an increase in downstream polyester costs. In the context of a lack of significant recovery in demand, cost transmission will be blocked, which will cause the polyester link to be squeezed and reduce production. Overall, in the first half of the year, The strong cost and weak consumption have caused obvious profit squeeze on the intermediate links.” Pang Chunyan said that the current cost is weakening, but the demand has not yet picked up. The prices of PTA and other intermediate chemicals have passively followed the decline of raw materials. To get out of the downturn, it is necessary to improve the cost After the decline, we saw a rebound in downstream consumption.
As far as the polyester market is concerned, the current supply contradiction in the industry chain is still prominent. The reporter learned that the current main contradiction in the polyester market is that the high factory inventory of filament yarn has been difficult to remove, although the operating rate of the polyester industry has dropped to a low level.
According to Pang Chunyan, the operating rate of downstream weaving, printing and dyeing and other links continues to decline in the off-season. This year’s data is significantly lower than the same period in previous years. The overall performance is that the bottom-up capacity utilization rate of the industrial chain is at a low level. In the final analysis, consumption is still weak. Although exports are resilient, the overall growth rate is declining.
Oil prices have fluctuated violently recently, and the chemical sector has also experienced greater fluctuations. For the polyester sector, on the one hand, the direction of oil prices still determines the absolute price trend. On the other hand, if oil prices stabilize, we need to pay attention to the enthusiasm of downstream stocking after the price plummets. Judging from the shipment volume of ethylene glycol in Zhangjiagang in the past two days, there has been a significant rebound.
“The enthusiasm for downstream stocking is mainly related to the company’s expectations for the market outlook. If the oil price continues to be pessimistic, the downstream stocking may be cautious; if after the oil price plummets, the downstream companies are not optimistic about the downside space of the market outlook, then they will increase stocking on dips. It is understandable to prepare for the peak season after August.” Pang Chunyan said that in the future, the polyester sector needs to focus on the inventory performance of each link, especially ethylene glycol and filament, which currently have high inventory pressure, and whether their inventory can be effectively reduced. change. Once the inventory pressure eases and the polyester operating rate rebounds, it will have a boosting effect on the raw materials PTA and ethylene glycol, and the industry chain may form a periodic positive feedback.
Chen Sheng said that with the increase in market macro-disturbance and the commodity bear market environment, domestic stimulus policies and the recovery of domestic demand will become an important driving force for the polyester industry in the future. In his view, the continued losses of polyester varieties will cause polyester companies to conduct summer maintenance, reduce inventory pressure, withdraw cash flow, and wait for peak season demand to improve. “The polyester sector is expected to continue its weak performance in July, waiting for demand to recover in the peak season from August to September.”
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