PTA: Entering Accelerated Decline Phase

Under the continuous collapse of oil prices, the recent domestic chemical market suffered bloodbath, and PTA futures fell back in anticipation of pre production shutdown, and fell below the 5000 yuan / ton integer mark on Tuesday, hitting a six year low.

　　 Oil prices fell. cost collapse

In November 28th, OPEC countries failed to reach an agreement on crude oil production reduction. International oil prices fell all the way. As of December 9th, crude oil prices fell by nearly 10 US dollars per barrel, or 13.5%. The price of PX is affected by the weakness of crude oil and the shrinking demand caused by the PTA plant's shutdown. The decline is deeper, from a relative high of 1052 US dollars / ton to 880 US dollars / ton CFR China, with a total decline of 16.35%. In the rapid collapse of the cost pattern, the PTA spot price fell, and the cumulative decline of futures reached 13%. At present, the price difference between PX and naphtha is kept at 336 US dollars / ton. PX production still has a small profit. Therefore, although Singapore's Jurong 800 thousand ton plant troubleshooting, South Korea's SK Ulsan plant load drop and some domestic equipment load reduction operation, PX supply has decreased compared with mid November, but the overall supply is still adequate relative to the low demand caused by large-scale domestic production of PTA factories.

　　 Factory shut down maintenance. PTA Rapid consumption of social inventory

In December 1st, the mainstream PTA factory announced the largest parking repair operation in history. Yisheng announced that the overall operating rate in December dropped to less than 50%. The 2 million 200 thousand tons of Hengli petrochemical plant temporarily stopped for 15 days, and the 4 million 500 thousand tons of Xiang Lu petrochemical plant stopped all over the line. The restart time was still uncertain. The three factories and factories of the PTA plant, including Jialong petrochemical, Jiaxing petrochemical and other industries, also had different levels of cut down operation. The domestic PTA plant's operation rate dropped to 72% from the end of last month. While the downstream polyester plant maintains a good pattern of production profit and inventory, the load is still at 80%. Therefore, at present, the PTA factory is in the early stage of accumulating the consumption of social inventory. Rough statistics, as of the middle of this month, the domestic PTA social inventory will drop to below 1 million 100 thousand tons, which is equivalent to the inventory level at the end of April. If Yisheng petrochemical and Xiang Lu Petrochemical two big PTA production giants continue to maintain car maintenance operations in the second half of the month, the tight supply of PTA will be a big probability event.

　　 Downstream demand Weak, but not fast.

As of December 9th, the polyester plant operating rate dropped from 81% at the beginning of the month to 80%, and the operating rate of Jiangsu and Zhejiang loom factories dropped 4 percentage points to 75% compared with the beginning of the month. It is evident that the demand for PTA downstream has gradually weakened in December. However, according to the monthly historical statistics of polyester production, the output of general polyester in December is smaller than that in November. Tracking pet links cash flow and inventory can be found that, with the recent decline in crude oil prices, polyester link dynamic profit reached 600 yuan / ton, a new high since 2012 and the overall inventory remained at about 11 days of the low level. Considering the delay of the Spring Festival this year and the current situation of polyester good production and operation, I think the demand for PTA in polyester link will not decline rapidly.