An Analysis Of The Causes Of PTA Market'S Sharp Strength

Since late July, PTA futures After a week of deep correction, it continued to rise again, with both positions and trading volume enlarged, and the price volume matched well. The main driving force for PTA's strength comes from the stronger fundamentals than futures. This is reflected in the fact that cost promotion and supply and demand relationship are significantly better than expected.

First, strong cost support. Since the international oil price bottomed out at the end of June, affected by geopolitical tensions in the Middle East, the international oil price has been fluctuating and rising, with few major corrections in the middle, giving strong support to downstream petrochemical products. The price of petrochemical raw materials such as PX and naphtha at the upstream of PTA is stronger than that of crude oil. Since late July, several sets of PX devices at home and abroad have been shut down for maintenance. In addition, new PTA devices such as Tongkun and Hengli are about to be put into production in the third quarter. Expectations of rising costs and tight supply stimulate PX prices to continue to rise, resulting in PTA production cost line always above the spot price. By the first ten days of August, PTA upstream PX and most downstream polyester products had different profits, but PTA still had negative profits.

Second, the supply and demand relationship in July August was significantly better than expected. The market believes that the biggest negative for PTA fundamentals is the centralized release of new PTA capacity in the second half of the year, and the supply turns to excess. The actual situation is that the expected new production capacity has been delayed for various reasons. At least the supply did not increase in July August. On the contrary, the existing PTA production equipment is frequently overhauled due to the adverse weather such as benefits, floods and typhoons, reducing the supply in July August. Due to the weather, Xianglu in South China, BP in Zhuhai, Pengwei Petrochemical in Southwest China and other enterprises in Jiangsu and Zhejiang, where polyester customers are concentrated, have staged interruptions in the transportation of contract goods. Downstream customers are forced to purchase spot PTA to replenish raw material inventory, aggravating the spot market The supply is tight.

While the supply of PTA is unstable, the polyester polyester market at the downstream of PTA has continued to improve since July, and it has become stronger since August, which surprised people in the industry. The operating rate of polyester has increased from 82% at the end of June to 85% at present, driving the demand for PTA to increase significantly. From July to August, the terminal textile industry is in the transition period from light season to peak season. After the price of upstream crude oil PX-PTA gradually stabilized, textile enterprises increased their efforts to stock raw materials. In the first half of the year, enterprises were pessimistic about future market expectations, and the raw material inventory was pressed to within a week or even zero. In July, we began to increase the efforts to replenish the inventory of raw materials. The stocking period of polyester filament and other chemical fiber raw materials was extended to more than 15-20 days, releasing a large demand, which led to the smooth transfer of the high stock of polyester polyester enterprises to the downstream sector for more than a month. After the completion of destocking, the polyester factory was confident of price rise, and kept raising product prices, ignoring the rise and fall of raw material prices in the upstream and the acceptance of downstream customers. In addition, the price of ethylene glycol, another polyester raw material, has risen sharply since late July, stimulated by the decline of port inventory and the repeated shutdown and maintenance of production plants in the Middle East, which has also become the incentive for the strong rise of polyester product prices. The texturing and weaving enterprises at the downstream of polyester and polyester have resolutely joined the ranks of purchasing in pursuit of growth under the psychological expectation that their sales have improved compared with the previous period and that they will not buy down, which has created a continuous hot market in the polyester and polyester market.

For the future market, we believe that the traditional peak season rising market of textiles from September to October is overdrafting ahead of time. Under the background of economic slowdown at home and abroad, decline in sales growth of domestic and foreign trade markets of textiles and clothing, gradual release of new production capacity and increase in supply, PTA and downstream polyester polyester fiber The strong market will not last. The second half of August is likely to end the upward momentum. This round of rebound is that the price of PTA and downstream polyester products in the spot market rose first, and then pushed up the price of PTA futures. When the rise of the spot market stagnates, the futures market also loses its momentum of rise, so we can pay close attention to the development and changes of the spot market.