PTA Price Rises In The Medium Term

Supply side, device maintenance increased; demand side, domestic textile consumption is expected to be strong, foreign trade orders are also expected to resume, PTA fundamentals as a whole, the price will continue to uplink.

Since the rebound in crude oil prices and the revival of domestic demand for terminal demand, the price of PTA has risen since May. The bottom of the crude oil release signal, coupled with its own access to the inventory cycle, the PTA rally is expected to continue.

The problem of excess oil has eased.

In May, the pace of economic recovery in Europe and the United States accelerated. At present, the 50 states of the United States have all restarted their economic activities, and the demand for the terminal has warmed up, and the US crude oil refinery has started to pick up. EIA data showed that as of May 15th, the US commercial crude oil inventories fell 526 million 500 thousand barrels, down 4 million 982 thousand barrels from the previous week. At the same time, crude oil inventories in Cushing area decreased sharply, down 5 million 587 thousand barrels per month. Global oversupply of crude oil and crude oil storage crisis eased.

The latest OPEC monthly report shows that the agency is optimistic that the worst period of the oil crisis is over, and sees signs that the world's major economies are beginning to recover, and the demand for oil products is good. With the improvement of supply and demand margins, the middle and long term bottom of crude oil prices will be clearer.

In addition, since the end of April, the price of PX has rebounded 57 US dollars / ton, and the cost of PTA has risen 190 yuan / ton, which is close to the increase of PTA. At present, the price gap of PX- petroleum brain is low, and it has a certain supporting role for PTA price under the expectation of higher oil price.

Increased accident of maintenance equipment

PX prices rose, polyester prices also rose, the current spot price increased by 8.3% compared with the end of April. Both the cost side and the finished product price increased, and the PTA processing profit increased to 750 yuan / ton, up 330 yuan / ton compared with the low level in late February. The processing profit is good. Since April, the operation rate of PTA has been above 90%. Recently, however, there has been an increase in overhauling of PTA devices. In the evening of May 19th, HP petrochemical production capacity of 2 million 200 thousand tons / year plant shutdown inspection and maintenance, Shanghai petrochemical production capacity of 400 thousand tons / year, Zhejiang Liwan polyester production capacity 700 thousand tons / year device, constant power production capacity 2 million 500 thousand tons / year device is also in the parking state. According to CCF statistics, as of mid May, the domestic PTA plant overhaul capacity of 7 million 100 thousand tons / year, accounting for 13.6% of the total capacity. In addition, in June, Hainan Yisheng production capacity of 2 million tons / year, Xinjiang Zhongtai production capacity of 1 million 200 thousand tons / year device also has maintenance plan, is expected to drag down PTA device operating rate dropped 9 percentage points.

Terminal demand gradually revival

China's epidemic control is strong, until mid May, except for a few areas such as Jilin, other regions of the country are at low risk level. Business super business has resumed business in an all-round way, stimulating consumption policies everywhere, boosting the revival of demand for terminal textiles. Overseas, the number of new crown cases in most countries in Europe and the United States has entered the platform stage. This month, most countries lifted the blockade measures gradually, and the gradual resumption brought about the expected improvement of foreign trade orders. Textile trade orders are polarized, masks, protective clothing and so on, which are promoted by overseas epidemic. Export volume is good, but the scale is small. The export volume of conventional textile yarns and clothing orders in the 1 quarter has dropped by 15%. With the restart of European and American economies, foreign trade orders are expected to resume in July.

Polyester turnover improved

In the wake of the revival of domestic textile demand and the improvement of foreign trade orders in Europe and America, the operating rate of Jiangsu and Zhejiang looms rose to 66.8% in mid May, and the start-up rate of polyester plant increased to 79.04%. At the same time, the polyester factories offered preferential sales promotion, weaving and adding projectile manufacturers purchased additional raw materials, and there was a general phenomenon of replenishment. Pet trading had a small peak before and after May 1, and the production and marketing rate reached 175% at a time. CCF data show that as of May 15th, POY stocks for 16.88 days, FDY stocks for 15.44 days, and DTY stocks for 23.64 days, respectively, decreased by 14.4 days, 12.5 days and 9.6 days respectively compared with March highs. In terms of weaving inventory, grey cloth inventory in Shengze area was 41 days, down two days from the previous high point.

To sum up, the PTA supply side device maintenance increased, and the warehouse size declined. The demand side is expected to gradually warm up in the domestic apparel consumption improvement and foreign trade orders recovery expectations, and to the upper reaches of the industry chain. Driven by good supply and demand, PTA prices still have upward space.