After the commodity market experienced a sharp decline last week, sentiment recovered on the 27th, coupled with the strengthening of international oil prices in overnight trading. Most chemical products continued to rebound, with polyester chains performing strongly. PTA and staple fiber both rebounded by more than 3%, with PTA reporting at 6,718 yuan and staple fiber at 8,160 yuan.
As the price fell rapidly, some buying orders for PTA were triggered. Its own supply and demand were acceptable, but the market lacked obvious positive drivers, and the cost side was still the main logic. As commodities stabilize, oil prices are technically recovering from oversold conditions. Geographical factors have once again become the focus of the market, including news that the G7 is considering imposing a price ceiling on Russian crude oil, and that oil supplies in Libya and Ecuador may be affected due to domestic political turmoil.
With the restart of PTA maintenance equipment in early June, PTA production increased. However, due to the drag of the terminal, it is difficult to increase the polyester load, and the contradiction between supply and demand has intensified. Considering that the traditional off-season is approaching, it is expected that the subsequent improvement of the polyester market will depend on the order situation during the “Golden September and Silver Ten” periods, and it is difficult for the polyester load to increase significantly.
However, the PTA spot basis further strengthened. Because after Fuhaichuang announced its maintenance plan recently, the market’s reluctance to sell has intensified again. At the same time, as July delivery approaches, some traders have a need to buy spot for delivery, which makes PTA spot buying more active. In previous years, July and August were the months when extreme weather such as typhoons were more concentrated. The market was worried that logistics obstruction would lead to an increase in PTA spot tightness, so buying was also more active.
Under the recent continuous decline in costs, the polyester staple fiber market has also sharply given back its previous gains. At the same time, judging from recent production and sales data, production and sales are relatively sluggish, and buying momentum is insufficient. Affected by high temperature and high humidity weather in the future, the electricity cost of textile mills is expected to increase in summer. At the same time, the yarn factory’s own profits are sluggish or even losing money, and the operating rate is expected to have a certain risk of decline. In terms of supply, after July, with the restart of maintenance equipment in Fujian, supply will increase significantly by then.
GF Futures said that the liquidity of the spot market has been tight recently, and the PTA basis has remained strong; coupled with the improvement in short-term market sentiment, the short-term trend of PTA has been strong. The mid- to long-term cost side is still under pressure, and the demand side continues to be weak, inhibiting the rebound space of PTA.
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