New Changes In The PTA Market

As the peak of oil consumption is coming in the summer, the demand for the market is increasing. The estimated excess inventory will be digested in the future. This is a clue from the latest inventory data.

In May 6th, data released by EIA showed that crude oil inventories in the United States last week (April 29th week) dropped by 3 million 882 thousand barrels, the first decline in January 2nd this week, announces that the trend of 16 consecutive weeks of increase has come to an end.

Among them, as the delivery point of NYMEX crude oil futures in the US, Cushing crude oil inventories in the area of EIA decreased by 12 thousand barrels, and the former value decreased by 514 thousand barrels, the first decline since November 2014.

Overall, the crude oil rebound will continue if the expected demand for crude oil is expected to improve due to peak oil consumption in the summer, but when oil prices are stable above $65 / barrel, many American producers will make profits and increase production.

In addition, we should pay attention to the fact that the US dollar index is supported by the 60 week moving average trend line. If the US dollar ends and adjusts to the rally, it will increase the resistance to further rebound of the crude oil.

2012 to 2015 is our country.

New capacity has been put to peak, and domestic production capacity is gradually overrunning.

As of the end of 2014, China's PTA total capacity reached 43 million tons.

In 2015, China still has about 8000000 tons of new capacity.

The total capacity is expected to reach about 51000000 tons.

After the huge expansion of capacity, there are some new changes in the PTA market.

First, the operating rate of the industry has dropped markedly.

In 2014, China's PTA industry started to operate at a rate of only 68%, which may be lower in 2015.

Secondly, PTA

A sharp drop in production enterprises generally loss.

Oversupply led to increasingly fierce competition for PTA enterprises. The price of PTA index fell from 12417 yuan / ton in February 2011 to 4498 yuan / ton in January this year.

Thirdly, the concentration of PTA market in China is improved.

By the end of 2014, the capacity of the three PTA giants in China accounted for 55% of the total domestic capacity, and the three giants were Yisheng petrochemical, Xiang Lu petrochemical and Hengli petrochemical.

Finally, the contradiction between supply and demand of PX is outstanding.

China's total capacity of PTA has reached 28 million tons of theoretical demand for PX, and the domestic capacity of about 12000000 tons is far from meeting downstream needs, with high import dependence and PTA price being significantly affected by PX prices.

In short, if the PTA price rises less than the upstream crude oil and PX, and the loss of the production enterprises will continue to enlarge, we can not exclude that the PTA market in China once again has a joint production reduction.

This is a factor that has potential support for PTA price under the background of excess capacity.