What Is The Trend Of PTA When The New Year Is Approaching?

With the rise of international oil prices, the overhaul of equipment and the market demand for downstream polyester products, PTA futures prices showed strong rebound after entering the 2019.

Under the joint action of cost side, supply side and demand side, last week, PTA futures prices showed a trend of upward shock. What will be the market trend of PTA in the last week before the festival?

Cost side support weakened

Last week, oil prices were weak and volatile, the US oil week fell 0.91%, and oil week fell 2.01%. The US government will open its doors for three weeks, and Venezuela has supplied or dropped substantially. Speculators have continued to warm up the price of oil, supporting the formation of oil prices.

But the number of Beck and Hughes drilling increased by 10, ending three consecutive drops, indicating that the rebound in oil prices encouraged shale oil producers to increase production, or offset the market's concerns about the attack, and investors worried about the trend of the global economy, which kept oil prices under pressure. Oil prices are expected to be more volatile in the near term.

The supply and demand side tends to be negative.

Last week, PTA futures were driven by futures and prices rose slightly. From the beginning of the week, 6500-6565 yuan / ton cash was raised to 6520-6560 yuan / ton cash on Friday, but it was not as good as futures, and the basis was narrowed to 30 from the 1905 contract 120-140.

On the downstream side, the polyester load rate dropped by 3% to 78.2%, and the terminal textile load rate dropped by 25% to 31%. The Spring Festival approached the downstream holiday, demand will continue to fall, and the trend of PTA dynamic supply tends to be loose.

In terms of installations, the negative time of Fuhai is expected to be delayed until the Spring Festival. Hua Bin's 1 million 400 thousand tons are expected to be overhauled for one month at the end of the month.

In terms of inventory, the total volume of mainstream Petrochemical stocks continued to increase, as the Spring Festival approached, the market was not enthusiastic, and petrochemical stocks increased due to holiday storage. On the downstream side, the volume of enterprises' inventories is increasing. Although some petrochemical prices have been lowered, the market atmosphere is empty, and the pressure on traders to ship is huge.

To sum up: near the Spring Festival, at this stage, the PTA operation rate has been raised, the weekly inventory has increased by about 110 thousand tons, the cumulative inventory speed will be accelerated, the superposition of spring is the peak of PX maintenance, and the high profit of PX is hard to be compressed. The change of the cost side is more likely to come from the change of the oil price, while the oil price is facing downward pressure from the macro and refinery operation, and the OPEC+ production support is down.

High volatility is expected to be the main factor, and the cost side is not strong. Overall, PTA price shocks are expected to be sorted out in the short term.