Introduction
After returning from the Spring Festival holiday, PTA jumped sharply higher on the first trading day of the main contract 2205. The spot price rose from 5440 yuan/ton before the holiday to 5760 yuan/ton, with an overall increase of 5.88%. The main logic of this round of rising prices is to follow the fluctuations of crude oil. However, as crude oil fell sharply, leading the decline in the domestic commodity market, PTA prices were no exception. They basically fell back to the price level before the Spring Festival holiday. So how will the PTA market perform in the future?
Data source: Jin Lianchuang
After returning from the Spring Festival holiday, the domestic PTA market has enjoyed a “good start”. The main logic of this round of rise comes from the strong support of crude oil. During the Spring Festival, oil prices surged, reaching a record high in seven years. Boosted by this good news, the PTA futures spot market rose sharply on the first day after the holiday. The main contract 2205 PTA gapped sharply higher on the first trading day, reaching an intraday high of 5,880 yuan. The closing price increased by 6.24% compared with before the holiday. ; The spot price rose from 5,440 yuan/ton before the holiday to 5,760 yuan/ton, with an overall increase of 5.88%. Although during this period, the 3.3 million-ton unit of Yisheng New Materials No. 2 successfully discharged materials, the 3.3-million-ton unit of Unit 1 and the 2-million-ton unit of Ningbo Yisheng were shut down one after another; at the same time, the demand for downstream polyester recovered slowly; but the fundamentals of supply and demand remained stable. Performance has little impact on the market. As the situation in Ukraine eased, international oil prices plummeted from their highs in more than seven years. Crude oil commodities as a whole responded immediately, leading the decline in the domestic commodity market, and PTA prices also followed suit. As of now, the spot price of PTA remains at 5,300-5,340 yuan/ton, down 7.64% from the first day after the holiday. PTA prices have retreated significantly, causing PTA spot market prices to return to pre-holiday levels, and the “good start” gains have been basically wiped out.
How will the PTA market trend be interpreted in the future?
Domestic PTA supply pressure is not great, inventory is accumulated or transferred to inventory
Data source: Jin Lianchuang
Judging from the trend of domestic PTA equipment maintenance losses, the maintenance capacity in February was about 5.95 million tons, mainly in East China, about 165,000 tons; the maintenance capacity in March was about 8.5 million tons, and the loss was about 254,000 tons, of which Northeast China Regional maintenance is concentrated; in April, the maintenance capacity was about 8.95 million tons, and the loss was about 300,000 tons, mostly in Northeast and South China; in May, the maintenance capacity was 3.4 million tons, and the loss was about 110,000 tons, mainly in East China.
Taken together, from March to April, PTA enterprise equipment will undergo centralized maintenance, and supply is expected to decrease. However, at this time, downstream polyester and terminal operations will gradually resume, and the consumption of raw materials will also recover simultaneously. In addition, as downstream companies enter the stocking cycle, the contradiction between supply and demand in the PTA market is not prominent from March to April. Judging from the trend, PTA is expected to change from overstocking to a slight destocking state in the second quarter.
Downstream polyester operating rate gradually recovers
Data source: Jin Lianchuang
As of now, the comprehensive operating rate of domestic polyester is 89.19%, which is 5.27% higher than before the holiday. With the continuous opening of polyester factories, polyester production has increased significantly. In terms of polyester filament, the average operating rate of enterprises is 89.1%. Tiansheng, Xinxin, Shenjiu and other devices have restarted, and the overall operating rate has increased significantly. In terms of polyester staple fiber, the overall operating rate of enterprises is 83.89%. Parking devices have basically restarted around the Spring Festival, and in the near future There is currently no maintenance equipment, so the start-up has increased significantly. Polyester PET: The average operating rate of fiber-grade PET factories is 88.79%. A 250,000-ton polyester device in Hubei has resumed production. The average operating rate of bottle-grade PET factories is around 92.04%. The average operating rate of mainstream manufacturers’ installations remains high.
Processing fees fell sharply, and corporate profits suffered losses
Data source: Jin Lianchuang
Judging from the trend chart, entering 2022, the processing fees of domestic PTA companies will continue to decline, from the original level of 600-700 yuan/ton to the current level of less than 300 yuan/ton. Domestic PTA companies suffered huge losses. Although oil prices have fallen sharply, the raw material PX undergoes frequent maintenance before and after the Spring Festival, and the reduced supply supports the price of PX, so the cost pressure of PTA is heavy. With the main PTA suppliers’ equipment maintenance, the supply is expected to decrease. At the same time, the demand for downstream polyester is gradually recovering, and the market accumulation has been eased. It is unlikely that processing fees will continue to fall.
Taken together, there is a high probability that the PTA market will still follow the fluctuations of crude oil in the short term. Due to the conflict between the United States and Russia, the uncertainty surrounding the Russia-Ukraine incident remains, and geopolitical tensions remain. This will support oil prices to a large extent, so the cost support for PTA remains. The supply side of PTA is expected to shrink further due to low processing fees. At the same time, downstream polyester and terminal demand are gradually recovering, and fundamental preferences also provide greater support for PTA prices. Therefore, it is less likely that the PTA market will continue to fall in the short term, and the basis may strengthen in the later period. We still need to pay attention to crude oil trends and the recovery of downstream orders.
</p
