Recently, the textile industry chain guided by the single repatriation incident in India has set off a wave of enthusiasm. On the 27th, crude oil and related varieties went out of a trend that “surprised” the market: API inventory exceeded expectations and OPEC+ Against the backdrop of the meeting insisting on increasing production, crude oil rose by nearly 1.5% instead of falling. The polyester raw material PTA, which has not been active for a long time, has also seen a chain reaction. On the 27th, PTA topped the night trading increase list with an increase of more than 3%. On the 28th, PTA hit the daily limit with a rise of over 4% in late trading.
PTA’s contract reduction by major major manufacturers in April was the highest in history
On the 27th, it was reported that a major PTA manufacturer announced a 50% reduction in the 05 contract. PTA futures prices rose sharply. PTA warehouse receipts have dropped to 1.18 million tons due to the active production reduction pattern of factories. The pace of PTA destocking has accelerated. As of now, there are 259,800 PTA warehouse receipts, which continues to decrease by about 17,800 warehouse receipts compared with last week. The overall decline in PTA social inventory is mainly due to the decrease in warehouse receipts.
Earlier, as PTA processing fees remained low, equipment maintenance increased. Tongkun has 1.5 million tons and can invest 1 million tons. Baihong has 2.5 million tons of planned maintenance. Later, Hengli Line 1 has 2.2 million tons and Dushan Energy has planned mid-month maintenance of 2.5 million tons. In April, the new maintenance capacity will be 9.7 million tons. . In addition, 9.34 million tons of production capacity is in shutdown mode. Among them, Reignwood, Ineos Phase 3, and Zhongtai were shut down in March, and there is no output expected in April. It is estimated that the PTA operating rate in April will be around 80%. By then, PTA output in April will be 4.098 million tons, a decrease of 422,000 tons from March.
On the one hand, the domestic supply side was affected by low processing fees in the early stage, and the maintenance increase was somewhat The increase has resulted in a month-on-month decrease in supply of 422,000 tons; on the other hand, in terms of foreign export data, countries represented by India, Saudi Arabia and Lithuania are expected to maintain exports in April 250,000 tons higher than the previous level due to increased export profits. Slightly lower than the export volume of 50,000 tons in March. The combined efforts of the two resulted in PTA’s destocking efforts in April being the highest in recent years.
International oil prices remain normal and strong demand helps PTA cost-side support
On the 27th, OPEC announced on its official website issued a statement confirming that the production increase plan from May to July will be maintained. In addition, the OPEC+ Joint Ministerial Monitoring Committee (JMMC) decided that the plenary ministerial meeting originally scheduled to be held on Wednesday will no longer be held. The 30th JMMC meeting and the 17th OPEC+ ministerial meeting will be held on June 1, 2021. .
According to the April 1 meeting, OPEC+ will increase production by 350,000 barrels per day in May and June, and increase production by 441,000 barrels per day in July; Saudi Arabia will also gradually withdraw The voluntary production reduction of 1 million barrels per day will “increase” production by 250,000 barrels per day, 350,000 barrels per day, and 400,000 barrels per day respectively from May to July. In other words, OPEC+ will increase production by more than 2 million barrels per day from May to July.
After the news was released, international oil prices rose instead of falling, recording the largest increase in nearly two weeks. Analysts believe that although the epidemic in India has had a certain negative impact on oil prices, optimism about a strong recovery in demand has offset market concerns about the epidemic.
In addition, the price of acetic acid continues to rise and squeezes out profits, which also boosts the cost side. It is understood that as of April 27, most manufacturers’ quotations for acetic acid fall between 7900 and 8100. yuan/ton, rising by 200 yuan/ton during the day, which means that the cost of acetic acid to produce one ton of PTA is 320 yuan. The increase in acetic acid prices is mainly due to the expansion of PTA production capacity; the shutdown of foreign acetic acid units has stimulated an increase in domestic acetic acid exports; the device failure rate in the acetic acid market has increased. Before the new acetic acid production capacity is put into operation, acetic acid prices may continue to trend strongly.
India’s single return flow stimulates downstream confidence to recover, and short-term stocking may pick up
New crown epidemic in India The number of confirmed cases has exceeded 300,000 for five consecutive days. Analysts believe that due to data distortion, collapse of the medical system, and shortage of vaccine supply, the epidemic in India is still likely to worsen.
As a major global cotton producer, consumer and textile and apparel exporter, India’s cotton exports accounted for 13% of the global market share in 2020. From the perspective of raw material supply, due to the Indian epidemic, Indian cotton Exports have been affected, and global cotton supply, except India, is expected to decrease in the short term. In terms of consumption, Indian cotton consumption accounted for 21% of total global cotton consumption in 2020. The Indian epidemic will also affect global cotton consumption expectations. In 2020, India’s textile exports accounted for 7% of the global market share, and clothing exports accounted for 4% of the global market share. This part of the market share will be seized by other countries due to the epidemic.
Affected by the epidemic in October last year, Indian companies were unable to deliver goods on time, resulting in more orders returning from India in the second half of the year, and many foreign trade companies experienced a surge in orders. The resurgence of orders added fuel to the rebound after the National Day last year, and contributed to the growth of export orders in the second half of 2020 to a certain extent.
“Recently, due to the severe epidemic situation in India, downstream orders have returned. However, if India does not close the country, the volume of orders transferred to the country will eventually be limited. In addition, , In terms of time, the peak textile season has passed, and the orders transferred due to the epidemic in India are also relatively limited.” Wang Xiao, senior cotton analyst at Hongye FuturesBei said. At present, in response to market rumors that a certain amount of textile and clothing orders from India, Myanmar, and Bangladesh have been returning to China due to various reasons such as the COVID-19 epidemic and social unrest since late March, middlemen in Zhejiang, Foshan and other places have reported that , there are indeed signs of an increase in recent inquiries and orders from overseas, mainly home textiles, bedding, jeans, T-shirts, etc. After experiencing a sluggish peak season and cautious stocking market conditions, the positive signal of the return of orders from India will in the short term boost confidence in downstream stocking, which is conducive to the destocking of the industrial chain.
From March 5 to April 23, the polyester operating rate has remained above 92% for eight consecutive weeks. On April 23, the polyester operating rate increased by 7% year-on-year. Among them, the availability rate of filament and short fiber is high, while the availability rate of bottle flakes has declined seasonally. The overall load operation of the polyester factory is stable, with the average load around 92.98%. Industry insiders have reported that there is a short-term polyester device load increase plan. For example, Xinfengming Zhongyue’s 300,000 tons/year device is expected to have a short-term load of around 93%. In addition, the recent increase in export orders for bottle flakes and the epidemic in India have also given the market favorable expectations for downstream demand.
The price driver of short-term PTA may still be on the cost side. The commissioning of new production capacity is expected to have short-term negative effects on PTA prices. However, considering the strength of the PX end, sluggish processing fees, increased maintenance volume, and the rebound in downstream demand due to India, PTA prices may move upward. </p
