Polyester chains retreated after a collective move higher at the start of the new year. PTA continued its upward trend since late December, further raising the trading center of gravity above 5,200 points; after successfully occupying 7,000 points, short fiber gradually moved closer to 7,500 points; ethylene glycol had the strongest rise and once recorded eight consecutive positives. .
What is the current main logic of the three varieties of polyester chains? Considering the current level of costs, will the main line logic not change in the future? What changes have occurred in the supply and demand side of the three recently compared with before the holiday? Is it possible that these changes will change in the medium term? Taking the above factors into consideration, can the polyester chain’s growth continue in the future? If it continues, how much space will there be above?
[Institutional Consultation]: Among chemical futures in the first week of the new year, the three types of polyester chains performed the strongest. What is the current main line logic? Considering the current level of costs, will the main line logic not change in the future?
Pang Chunyan, senior analyst at SDIC Essence Futures: The surge in polyester is mainly driven by rising oil prices. In addition, installation problems are also the reason for the strong polyester raw materials. Yisheng Ningbo PTA’s shipments were slow due to the epidemic, and its load dropped slightly. The 1.2 million-ton unit in Sanfangxiang was temporarily suspended. The price of short fiber mainly passively follows the operation of PTA.
The important benefit of ethylene glycol is that the industry’s poor production profits lead to expectations of equipment production reductions. Calculated based on naphtha, the loss of the integrated unit reaches about US$120/ton. In addition to ethylene glycol, the profits of other downstream products of ethylene are also average. The overall profit of the ethylene cracking unit is poor, so some units are expected to further reduce production, such as China Shipping Shell Cracking has already reduced its load and Yangzi BASF may also reduce its load. It is difficult for the Far Eastern Unit to increase its load as planned. Zhejiang Petrochemical Phase II temporarily shut down during New Year’s Day. It was originally planned to be a week, but the actual delay in restarting was also related to efficiency. In addition, there are many sets of equipment abroad that are expected to reduce production. With oil prices on the strong side and supply shrinking expected, the price trend of undervalued ethylene glycol is on the strong side.
Zheng Yan, industrial products analyst at Huishang Futures Research Institute: Recently, the three futures varieties PTA, ethylene glycol and short fiber on the polyester chain have been operating strongly. The main logic is the support of the cost side. The center of gravity of international crude oil prices has rebounded recently, giving PTA and ethylene glycol better cost support. The center of gravity of thermal coal has also increased slightly after continuous downward adjustments, which has certain benefits for the ethylene glycol coal production process. Against the background of stronger cost support, PTA and ethylene glycol have also experienced a slight increase in the center of gravity. The strong operation of ethylene glycol has led to a significant increase in the cost of short fiber, and it has also experienced a wave of rising prices against the background of strong costs. In the later period, after a periodic rebound in crude oil prices, it is expected that there will be insufficient motivation to continue to rise, and there may be demand for adjustment in the short term. The increase in coal prices is limited, and it is expected that there will be a lack of sustained upward momentum in the later period. Overall, the cost side will have a negative impact on polyester chain futures in the later period. The support of varieties is expected to weaken.
Founder mid-term futures energy researcher Zhai Qidi: The main logic behind the outstanding performance of varieties in the polyester industry chain last week lies in the resonance of rising costs and terminal pre-holiday stocking needs, while valuation levels and the degree of improvement in supply and demand margins determine the rise and fall of varieties. of differentiation. For example, ethylene glycol’s previous valuation was low, each process was at a loss, and there was an unplanned loss at the supply margin last week. It had the strongest performance among the three polyester varieties. The current price of crude oil has reached a medium-to-high level, with short-term or high fluctuations, and no sustained upward momentum. As the Spring Festival holiday approaches, the demand for pre-holiday stocking is also coming to an end, and the main logic of the future may change.
[Institutional Consultation]: What changes have occurred in the supply and demand of the three recently compared with before the holiday? Is it possible that these changes will change in the medium term?
Pang Chunyan, senior analyst at SDIC Essence Futures: Judging from the installation load data, the loads of PTA and MEG dropped slightly after the holiday compared with before the holiday, of which PTA dropped from 80.6% to 77.4%, and ethylene glycol dropped from 62.8% to 58.9%. , the polyester load rebounded from 84% to 85.5%, a steady increase, and the polyester staple load rebounded slightly. Overall, the supply and demand of polyester raw materials are tighter than before the holiday, and the supply of polyester shorts has increased, but the performance of production and sales is average, and weekly inventory has rebounded slightly. In the medium term, the expected growth in ethylene glycol supply will continue to suppress the market. Zhenhai Refining and Chemical’s 800,000-ton new unit has already discharged upstream ethylene. Ethylene glycol is expected to be discharged within this week. The load of the Anhui Red Sifang unit will increase from 5- 60% increased to full capacity. In the later stage, the 500,000-ton units of Fude Energy and the 500,000-ton units of Sinochem Quanzhou were both overhauled in early December, which is scheduled to take 45-50 days, and are expected to be restarted in mid-to-late January. Therefore, the ethylene glycol market supply growth is expected to be strong, short-term price increases, and moderate profit recovery will be conducive to the smooth restart of maintenance equipment. Among the PTA devices, the 4.5 million-ton unit of Fuhua Industry and Trade is likely to be completed and restarted in the second half of the year. In addition, the new 3.6-million-ton unit of Yisheng New Materials is expected to be put into operation. Downstream demand will enter the Spring Festival intensive maintenance period, and the industry’s operating rate is expected to decline moderately. Therefore, the supply and demand of PTA and MEG will become loose again.
Zheng Yan, industrial products analyst at Huishang Futures Research Institute: From a supply perspective, PTA’s operating rate has increased slightly compared with before the holiday. As of January 9, PTA’s current operating rate is about 77.07%, and the ethylene glycol operating rate has increased compared with before the holiday. As of January 7, the non-ethylene process operating rate was approximately 41.7%, and the ethylene process operating rate was approximately 58.83%. Downstream polyester demand has weakened slightly. As of January 6, the domestic polyester factory load was approximately 78.31%. In terms of short fiber, as the Spring Festival holiday approaches, the demand side has weakened. Overall, the fundamentals of the three products show a pattern of reduced supply and demand compared with before the holiday.��It is expected that demand will still be weak before the holiday.
Founder mid-term futures energy chemical researcher Zhai Qidi: In the current period, terminals are following up on inventory replenishment before the holiday, the industrial chain has increased prices and passively destocked, and the polyester operating rate has been stable and slightly increased. As far as PTA is concerned, equipment maintenance and restart have been paralleled since New Year’s Day, and the industry operating rate is 77.4% (-3.2%). As far as ethylene glycol is concerned, the import volume in January showed a rebound trend from the previous month. Affected by the unexpected delay in restarting the Zhejiang Petrochemical plant, the ethylene glycol operating rate was 58.87% (-3.95%). As far as polyester staple fiber is concerned, driven by pre-holiday stocking, the pressure on terminal inventory of polyester staple fiber continues to decline, and the operating rate of direct spinning polyester staple fiber is 84.6% (0.8%). As the Spring Festival holiday approaches, and the price of polyester raw materials reaches a high level, it is expected that terminal speculation and stocking demand will gradually weaken, and the operating rates of printing and dyeing, weaving, and polyester will welcome the seasonal decline. Subsequently, there is insufficient follow-up on the new maintenance of the PTA unit. With the restart of the unit, the PTA operating rate will rise to 80% in the middle of the year; the new ethylene glycol Zhenhai refining unit is about to be put into operation. At the same time, import volume is also picking up, and its supply pressure will be reduced. Recovery; some short fiber installations have maintenance plans during the Spring Festival, and the operating rate may drop within a narrow range. Although the direction and magnitude of subsequent supply pressure changes among the three are different, due to the seasonal decline in demand, it is expected that all three will be in a state of accumulated inventory from January to February, and the margins of supply and demand are expected to weaken.
[Institutional Consultation]: Considering the above factors, do you think the rise of polyester chain can continue in the future? If it continues, how much space will there be above?
Pang Chunyan, senior analyst at SDIC Essence Futures: An important driver of the rise in polyester chain products is cost. Against the background of medium and long-term supply growth, installation problems can only cause short- to medium-term disruptions. It can be seen from the performance in early trading today that once oil prices weaken, polyester products will follow suit. Therefore, whether the polyester chain’s rise in the future can continue depends most on crude oil. It mainly passively follows the rise in oil prices. There is currently a lack of independent rising drivers, so it is difficult to have optimistic expectations about the space above.
Zheng Yan, industrial products analyst at Huishang Futures Research Institute: Under the weak fundamentals, the polyester chain basically follows a cost-led logic, and the trend is greatly affected by crude oil and coal prices. Recently, crude oil prices have shown a correction in demand, and the increase in coal prices is also expected to be limited. Under the expectation of weakening support on the cost side, polyester chain varieties have also been affected by certain negative effects. However, since the supply side has also shown a shrinking trend, it may be relatively resilient at present. . As the Spring Festival holiday approaches, the demand side is expected to weaken. Overall, the price focus of the three types of polyester chains may decrease before the holiday. We still need to pay attention to the impact of crude oil and coal prices on the market.
Founder mid-term futures energy and chemical researcher Zhai Qidi: Considering that the Spring Festival holiday is approaching, the demand in the polyester industry chain will face a seasonal decline. The supply and demand margins of PTA, ethylene glycol, and short fiber are expected to weaken. At the same time, cost-end crude oil prices have also reached high levels. , there is no sustained upward momentum yet, the short-term polyester industry chain growth is expected to be difficult to sustain, and there is a possibility of a correction before the holiday.
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