PTA Supply Increased Downstream Downstream Season

Moreover, for the long term resource goods, the lower the price, the more power output will increase.

As recently announced in December last year, the output of Russia and Iraq, the former hit a new high since the collapse of the Soviet Union, and a record high export level in southern Iraq.

Saudi Arabia, the world's largest oil producer, has repeatedly indicated that it will not cut production.

As the world's largest consumer of crude oil, the United States is also the main producer of the crude oil production, and the situation is not optimistic.

The US Department of energy data showed that crude oil and refined oil business inventories (excluding about 700 million barrels of strategic oil reserves) were slightly below 1 billion 140 million barrels level as of last 12 months.

More important than absolute inventory level is the change in business inventories last month. In December, US crude oil and refined oil business inventories rose.

It is worth noting that refineries usually reduce their inventories at the end of the year to reduce taxes as much as possible, but inventories rose at the end of last year.

Looking back on history, from 1980 to now, there were only two crude oil inventories in December, one was the 2008 financial crisis, the other was last year.

Excluding these two years, the average stock in 1980 has fallen by nearly 32 million barrels since December.

On the other hand, the International Energy Agency estimates that global oil consumption will drop by nearly 1 million barrels in the first quarter of this year compared with the fourth quarter of last year.

Therefore, under the high inventory structure, the demand side is also weak, and the crude oil decline is still not over.

The decline in crude oil brings a void to the downstream market.

Moreover, naphtha and PX also fell along with crude oil, and the cost of PTA material dropped sharply.

In January 7th, naphtha in Asia had fallen below 450 US dollars / ton, and PX fell below 800 US dollars / ton.

The supply of naphtha in Asia is still abundant.

Traders said that in January, Asia and Europe shipped about 2 million tons of arbitrage cargo in Europe and America, and heard that 1 million 500 thousand tons were shipped in February.

Naphtha buyers are more wait-and-see attitude, turnover is relatively light.

Petrochemical companies say that the market has weakened recently, profits are under pressure and inventories are rising.

At present, the price difference between PX and naphtha is still 380 US dollars / ton, which means that the efficiency of integrated refineries is acceptable, and PX production enterprises will continue to maintain a relatively high operating rate.

At the end of December last year, China's PX plant was reactivated, and China's own PX supply would also increase.

PX, like naphtha and crude oil, will be on a downward trend due to oversupply.

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According to the historical rule of production, PTA factories usually maintain a higher level in 1 and February each year.

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On the one hand, enterprises need to import funds at the end of the year.

To do some financing operations, on the other hand, bank assessment at the beginning of the year, enterprises in order to get credit, also has the initiative to raise the rate of operation.

In addition to the above two factors, we should also consider that in the first half of December last year, PTA enterprises had just carried out the "alliance". At the end of December, the mainstream factories were driving one after another, so the probability of continuing high work rate in January was greater.

This increases the factor of industrial level in the negative factors of cost down, and bears a larger margin of safety.

Downstream polyester market because of low raw materials, since September last year has been better, higher profits, lower inventory, operating rate maintained at a high level near 80%.

Moreover, according to statistics, only 2 million 100 thousand tons of polyester production capacity will be stopped during the coming Spring Festival, which is negligible for the total capacity of about 40000000 tons.

Polyester end is still the best link in the whole industry chain.

In short, there are two main reasons for the decline of PTA: first, the cost of crude oil, naphtha and PX drop down; two, the PTA plant will maintain a higher operating rate from 1 to February, and the supply pressure of PTA itself is greater.

In addition, PTA downstream polyester market is in good shape, but there will be small scale maintenance next. There is limited space for polyester market to increase PTA demand again.