PX Device To Overhaul PTA Futures In Large Areas Now Has Many Opportunities.

In the early May, due to the large overhaul of the PX device, and the addition of many new PX installations in Asia, the PX supply was reduced and the price went up.

Affected by the price increase of PX, the cost of PTA production enterprises has increased and losses have intensified.

Under such circumstances, a number of PTA enterprises jointly limited production and insured prices, pushing up PTA prices and easing their operating pressure.

The price of PTA futures contracts rose from 6024 yuan / ton to 7100 yuan / ton under the effect of limited production and insured price.

However, as the price of PTA rises, driven by the spirit of buying and selling, the polyester enterprises make up the library earlier than before, and the implementation of the new way of settlement is PTA

The risk of production and operation is pferred to downstream polyester enterprises.

Affected by this, polyester enterprises are overburdened, the willingness to supply and supply will drop, and crude oil will fall sharply, leading to the PTA futures "brave" new low.

But as the price of PTA falls, futures prices are approaching variable costs again. We believe that PTA futures have fallen out of opportunities.

First of all, because of huge investment, PTA enterprises can hardly pfer investment or dismiss employees in the short term, so passive production is the only way to alleviate losses.

From the western economic theory, when the commodity price falls below the total cost but is still above the variable cost, the enterprise will continue to produce, but when the price of PTA falls below the variable cost, enterprises continue to produce will only aggravate their own losses, so we think that the variable cost is

The price will form a support.

So the problem is, the cost of PTA is dynamic. If the cost center of gravity continues to move down, then PTA still has room to fall. Our assumption is not valid. Next we will analyze the problem concretely.

First, there is only one variable in PX in the PTA variable cost formula. Therefore, we only need to consider the change of PX price to judge the running trend of PTA variable cost. At present, the main factors affecting the price of PX are crude oil and its own load.

Second, under the combined effect of the low consumption season and the ease of supply, the price of crude oil dropped sharply. Saudi Arabia, for its consideration of sanctions against Iran and Russia, sold the crude oil at a low price.

The normal operation interval of crude oil is between 80-110 US dollars / barrel, and the price of crude oil has fallen below 80 US dollars / barrel at present.

And the major factor is the US and Saudi Arabia selling crude oil.

In the later stage, the selling of crude oil in the west is a short-term behavior. The price of crude oil is hard to keep under 80 US dollars / barrel for a long time. The price difference between PX and naphtha is also close to a low point. From the perspective of cost, the price of PX is limited.

Third, at present, the operating rate of PX enterprises is relatively stable, and the supply is unlikely to increase significantly in the short term.

Therefore, we believe that the price of PX is limited and the cost is effective for PTA.

Through the above analysis, we believe that the main reason for the recent PTA slump is the collapse of costs. But at present, the price of PTA futures is approaching variable costs, while the price of crude oil and PX is relatively limited. Therefore, we believe that the price of PTA is expected to remain stable.