Polyester Support Limited PTA Will Return To Decline

Polyester production and sales booming, the peak season trend may continue to October.

The author recently visited several polyester factories in eastern China and found that the polyester industry has greatly improved compared with that in August.

Polyester stocks kept low, and there was basically no financial pressure; the polyester enterprises started to operate at above 70% and 100%.

Polyester downstream customers weaving situation is also similar, the overall inventory is low, sales are good, some of the better brand weaving enterprises profit, gray cloth sales have been discharged to the end of October.

According to the data from the author, polyester industry profits have risen sharply since the beginning of August, and the profit level of polyester DTY has reached a two-year high in the middle of September.

In fact, the improvement of polyester profits is not achieved through the increase in prices. Polyester prices have also dropped recently. However, PTA and MEG in polyester raw materials have dropped more, and the price of products has declined less than raw materials, resulting in the rapid rise of polyester profits.

The overall operation rate of polyester in Jiangsu and Zhejiang provinces rose from 69% at the end of August to 71% in mid September, while the commissioning rate of terminal weaving remained stable for 78% weeks in 3 weeks.

Quite a few polyester factories believe that the high production and marketing of polyester can last until mid late 10, and then it is a big probability to gradually fade away.

The good production and marketing of polyester is the main support for PTA price.

PX continued to ferment, and PTA supply increased.

This year, PX's new capacity in Asia has been released in the two quarter, and the supply of PX will gradually increase.

In August 11th, the price difference between PX and naphtha was as high as 550 US dollars / ton, and now it drops to 350 US dollars / ton. Even so, PX production is also profitable.

From the start up rate of China and Asia, and the delay of maintenance, PX

Will continue to increase, in the continuation of the weak crude oil pattern, PX prices are likely to continue to decline.

PTA

It continued to play a role in the first half of September, and the PTA operating rate remained below 60%.

According to the operation rate of polyester 71.4%, the load of maintaining the balance between supply and demand of PTA is 63%, and the operating rate under 60% needs to be kept in stock.

Recently, however, the PTA plant has resumed production, and the new capacity of the three lane has begun to test. The PTA operating rate has risen to 65% at a time. If this trend continues, the social stock of PTA will increase again.

In July and August, despite the strict control of the PTA plant, the PTA social inventory increased by about 250 thousand tons because of the negative growth in polyester production.

If social inventories increase again in September, in the scarce market of spot trade, the surplus inventory will become the direct power of PTA price decline.

In short,

The fundamental reason for the decline is that the whole industry chain is not as fast as the downstream demand.

The supply of crude oil market is adequate. The continuous expansion of refinery overhaul and Brent current price difference in 9 and October means that crude oil will continue to be vulnerable to oscillation.

PX's operating rate is still rising, and PX's decline has not changed.

At present, good production and marketing and just demand of downstream polyester are the strongest support for PTA.

In the short term, PTA will oscillate between 6200 and 6400 points, and as the downstream demand becomes thin, the PTA market will return to the downtrend.