Cost Support Collapse PTA Was Hit Hard

Crude oil fell sharply due to the external disk, and the PTA market gradually weakened before the holiday. Yesterday, the PTA futures contract fell more than 5%, reaching a limit in the 1501 session. Looking ahead, the pattern of PTA's medium-term decline has not changed. Even if crude oil prices temporarily stabilise, the high profits of the PX industry also mean that PX prices still have room to fall. In the short term, the ACP settlement price of PX10 months determines the production cost of PTA, and PTA futures have a steady demand for oscillation.

　　 Crude oil slump, upstream costs support collapse

A survey released in early October showed OPEC's oil output jumped to its highest level in the past two years in September, as Libya's output rebounded further and Saudi Arabia and other OPEC member states increased production. Meanwhile, Russia's crude oil production in the world's top two oil producing countries increased by nearly 0.9% to 10 million 610 thousand barrels per day in September. Shale oil production in the United States is also accelerating. In mid September, Nissan rose to 8 million 800 thousand barrels per week from 8 million 500 thousand barrels a week, the highest output point in the United States for about 30 years.

Supply is increasing, but demand is less than expected. The gross profit of the global refinery is also declining. The refineries in the United States have begun to overhaul, and there is still a downward trend in the operating rate. The high level of oil storage in Europe, especially diesel stocks, has reached a two-year high point, and the probability of lowering the burden of European refineries is greater. Judging from previous forecasts, 9 and October are also the two months of centralized maintenance of refineries. The scale of the market is bigger in October, and the demand side of crude oil is difficult to recover steadily, and oil prices will continue to search for the bottom.

The drop in crude oil also lowered the price of naphtha, and naphtha was also in a weak supply situation from the inventory and price structure of naphtha. As of October 7th, the price of naphtha CFR Japan was 808 US dollars / ton. PX as a direct source of PTA also fell sharply, the price of which is CFR Taiwan 1196 US dollars / ton. The difference between PX and naphtha is still as high as 388 US dollars / ton, and PX's production profit is still very high, which shows that there is still room for further downtrend.

　　 PTA supply is expected to increase larger and lower. polyester Mediocre

PTA Current price When PTA fell below 6000 in early May, the loss of the PTA plant reached the highest level in history. Considering the cost of excipients, the price difference between PTA and raw materials was almost zero. Against this background, PTA production giant has formed a reduction alliance. The current alliance has collapsed. The direct representation of the Union's collapse is that the settlement price of the September contract was not set according to the PX price +720 yuan / ton agreed by the alliance. The reason behind this is that a factory failed to abide by the alliance agreement. The collapse of the alliance means a substantial increase in supply. Between 6 and September, some factories took the initiative to reduce production and control production, while others became the direct beneficiaries of other enterprises to reduce production. They increased their operating rates and actively sold their products. The collapse of the alliance means that the early production reduction enterprises will significantly increase the operating rate, and the market will return to the previous "killing" stage. In fact, since the end of September, the start-up rate of PTA enterprises has begun to increase gradually.

and PTA The downstream polyester and weaving Market is still in the peak season of "golden nine silver ten", but compared to September, the polyester and weaving industry continued to increase production in October with limited space. When the terminal looms entered September, the operating rate for 3 consecutive weeks was maintained at 78%. In September 26th, the week slipped slightly to 77%, and the polyester operating rate reached 67.5% in August, then gradually increased, and then rose to 70.6% in September 5th, and then rose to 71.4% in September 19th, and then reduced to 71.2% in September 26th week. These data indicate that the terminal and downstream markets are already exhausted, and the best case in October is only to maintain the status quo.

In short, upstream raw material price support is limited, downstream polyester good production and marketing situation to boost prices less, at the same time, PTA itself supply increased probability is bigger, PTA mid term decline continues. However, taking into account the October PXACP offer at 1210 US dollars / ton, even if the price of PTA is calculated at zero processing fee, the price of the PXACP is also 5850 yuan / ton, so the 1501 contract is expected to return to the vicinity of 6000 yuan / ton.