Recently, PTA, a popular raw material in the textile and chemical fiber market, has once again come to the forefront. Since the Dragon Boat Festival, the market price of PTA has risen rapidly and significantly. In just one week, the cumulative increase has exceeded 900 yuan/ton, an increase of 13.50%. But the good times did not last long. As the main contract of PTA was suddenly suppressed last Friday, the night trading on the 10th fell sharply by 238 points or 3.15%, which once again shocked the industry. The market direction seems to have swayed!
As the big brother of raw materials, as the second largest variety of commodity futures trading, every move affects the entire upstream and downstream industries. Such sharp rises and falls have also made the textile and chemical fiber market extremely entangled. After this thunder, will the market still be the best? Or turn back the way you came?
PX’s plunge became the trigger
But it’s more of a short-term adjustment
As the main raw material of PTA, the market price of PX continues to rise due to the tight supply and demand of crude oil and the influence of geopolitical factors. Among them, the unexpected loss of PX equipment in Japan and South Korea coincided with the peak travel season in the United States, and the decline in gasoline inventories stimulated a sharp rise in PX. During the Dragon Boat Festival, crude oil exceeded US$120 again since March. On the first day after the Dragon Boat Festival, the price of PX increased by more than 12% compared with before the holiday. Top-down pressure attributable to the cost side gradually advanced.
Since the Dragon Boat Festival, PTA market prices have risen rapidly and significantly. In just one week, the cumulative increase has exceeded 900 yuan/ton, an increase of 13.50%. Even so, it has not caught up with the increase in raw materials.
The biggest factor that triggered the collapse of PTA on the 10th was the large drop in the quotation of PX. It is understood that with the decline in naphtha prices, PX on the 10th fell sharply by US$86/ton compared with the previous day, and was valued at US$1,413/ton. tons CFR. PX, which had surged in the early stage, fell sharply and returned directly to the price on the 6th, which suppressed some bulls in the market.
Since mid-to-late May, PXN has continued to remain at a high level. The price difference of over 400+ has driven the rapid increase in the burden of domestic PX equipment. Even though the domestic PTA equipment has declined to avoid risks, overseas demand has been strong, and PXN has continued to maintain an upward momentum. During this period, PTA processing fees have been interrupted. Prices have recovered to a range of 300-400 yuan/ton, but the raw material side has risen rapidly and significantly, and PTA processing fees have entered the negative range again since March.
In the editor’s opinion, although PX has made a correction, the support due to the cost side has not been broken under the high base, while the PTA processing fee is still in the low range, and there is an expectation of recovery.
Raw materials are still likely to rise again
Downstream is still weak
Upstream raw materials still have the possibility of rising again, but looking at the downstream, it is still difficult to conceal the weak situation.
As the cost side continues to rise, the aggregation cost also remains at 7,000 yuan/ton. The early market demand is weak, and polyester filament manufacturers have no intention of following up on price adjustments. As cash flow losses intensify, polyester filament manufacturers have to Speed up the pace and follow upstream to adjust prices.
At present, most weaving factories still report that new orders are scarce, the market transaction atmosphere is deserted, and the inventory pressure of gray fabrics in factories is high. In addition, the price of upstream textile raw material polyester continues to rise, and downstream profits are significantly compressed, so orders are particularly cautious. Orders are relatively low, and the operating rate of weaving factories continues to run at a low level. Currently, the comprehensive operating rate of texturing machines in Jiangsu and Zhejiang is 57.00%, down 5.40% from last week. The market has a strong wait-and-see sentiment, and the current market is still in a relatively difficult stage.
In addition, considering that although it is difficult for the market to undertake a rapid and substantial increase, there is no significant decline expected in the short term for weaving and polyester. Due to rigid demand support, it is still relatively stable. It is expected that market prices will remain stable and strong, or there may be a short-term correction window. , the far end will further heat up or decrease with the back channel negative feedback, or there may be expectations of weakening.
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