PTA Of Textile And Clothing Consumption In Peak Season May Decline

In the second quarter, only 700000 tons of new PTA capacity was put into production, while in the third quarter, more than 4.2 million tons of PTA units will be put into production, which will lead to tight raw material supply and bad luck in increasing PTA supply. However, the final market direction of PTA will depend on the terminal demand.

Assuming the peak demand season in August, Textile clothing Demand shows explosive growth, then overcapacity is no longer the main contradiction, PTA is expected to show a steady upward trend. However, if the demand performance is average, PTA will be more likely to rise first and then fall.

Increased production capacity will cause concern about raw material supply

PX has recovered steadily since July. On the one hand, it is supported by the strong crude oil oscillation, and on the other hand, PTA's new capacity is facing production. The market expects PX demand will increase, so the bullish expectation of PX is strengthened. Especially on July 13, after the news that Fujia Dahua's 700000 ton PX production capacity had been overhauled for a month came out of the market, PTA rose strongly, and the previously suppressed bull sentiment broke out. At present, it is a hot summer, and the probability of chemical plant failure increases, which will cause sharp market fluctuations at any time. PX supply is tight, which will become the most favorable stronghold for bulls.

For PTA enterprises, if the production suffers long-term losses, some enterprises will choose to reduce the operating rate. In addition, enterprises with new and old devices will first choose to open new devices to ensure their normal operation, and then adjust the operating load of old devices according to market conditions, or directly close some old devices. Some enterprises may choose to reduce production and purchase PTA from the market to ensure the demand of downstream contract goods users. Therefore, if the enterprise suffers from obvious losses for a long time, the operating rate of PTA will be reduced, and the tight supply of PX will no longer exist.

High inventory of polyester will become the market norm

At present, the polyester production capacity continues to expand, but the downstream demand has failed to follow up, and the textile and clothing market has shrunk due to the decline of the market economic situation. Therefore, the excess demand for polyester production capacity has led to the high inventory of polyester plants becoming the market norm. 1、 Since the second quarter, the inventory of polyester plants has been at a historical high, and the pressure has been transferred upward, resulting in pressure on PTA prices.

In the third quarter, the demand for textile and clothing will gradually enter the traditional peak season from the off-season, usually in the middle and late August, but before that, the market situation was not clear, and the market's expectation for the peak season will become the driving force for PTA to rebound. At the end of the third quarter, the situation of the textile market will gradually become clear, and the PTA market will also return to the supply and demand fundamentals.

As far as the current market reflection is concerned, the demand situation of textile and clothing in the second half of the year is still difficult to be optimistic, and there is little possibility of explosive growth. However, the improvement of the rapid appreciation of the RMB against the US dollar, the adjustment of the textile and clothing export tax rebate policy, and the fall of raw material prices are all conducive to the recovery of domestic and foreign textile demand. Therefore, the demand side will be improved compared with the current one. At that time, the loom load in Jiangsu and Zhejiang will pick up, and the fabric turnover in the textile city will also increase. In addition, a large number of new polyester production capacity will be put into production in the third quarter, which may offset the growth in the peak season, and the market will remain weak.

PTA price will rise first and then fall

From the capacity expansion dynamics of the upstream and downstream of the industrial chain and the seasonal analysis of demand, in the early third quarter, the market will focus on the large-scale production of PTA's new capacity, but the supply of PX is relatively stable, so the price of raw materials may become stronger, and even the failure of some irresistible factors may cause the market to soar. At the end of the third quarter, the focus of the market may turn to demand. Due to the weak economy, the demand will eventually rise steadily.

In addition, after the expected failure of the textile and clothing consumption peak season in the second half of the year, PTA and polyester production capacity will be released, and loose supply and demand will become a new focus of the market. At that time, PTA prices may gradually weaken, and the speculation of tight raw materials will also fail. At present, PTA rebound market may continue, but there will be short opportunities near 8400 in the later period.