PTA Period Price Has Dropped 10% Higher Than The High.

In April, influenced by the overall strength of the domestic commodity market, the PTA price oscillation rose and reached a recent high of 5212 yuan / ton in April 27th.

Then, with the upsurge of retreat, the PTA price fell sharply, and the main contract closed at 4686 yuan / ton on Wednesday, down 10% from the high level.

On the whole, the price of upstream crude oil and PX is stronger and uplifted.

Production cost; PTA balance of supply and demand in the middle reaches; polyester consumption in the lower reaches steadily rising, and overall good PTA.

Considering that the current PTA price has dropped 10% from the high level, the next step may be strong oscillation.

As oil prices plummeted, the cost of drilling for high cost shale oil in the United States decreased and the number of drilling platforms continued to decrease.

As of May 13, 2016, the number of oil drilling platforms in the United States dropped 8 weeks to 318, compared with 1600 at the end of 2014, a drop of 80%.

There is no sign of slowing down the number of drilling platforms in the United States.

It is understood that the effective life cycle of shale oil wells is 2 to 3 years, and the wells put into operation during the peak period from 2012 to 2014 have gradually entered the dry period. Since the end of 2014,

The number of cliff slipped, and the new capacity in the future can not make up for the failure of old oil fields.

According to the ratio of drilling platform number and output, shale oil production will be reduced by 80%, and the reduction will exceed 3 million 500 thousand barrels per day. The drop is much larger than that of the current 1 million 500 thousand barrels / day supply.

With the arrival of peak summer gasoline consumption, high oil stocks will begin to decrease.

Saudi Arabia, Russia and Iran have limited short-term capacity to increase production, while the supply of crude oil is narrowing, and the next supply may fall faster than expected.

Once demand exceeds supply, oil prices will continue to rise.

PX, due to domestic

Capacity growth is slow, supply gap is offset by imports, imports have increased from 930 thousand tons in January to 1 million 150 thousand tons in March, supply is tight or support for PX prices.

Supply side, the end of April, the Taiwan based industry (annual capacity of 1 million 200 thousand tons) and the Hon Bang Petrochemical line (annual capacity of 1 million 100 thousand tons) PTA device restart, May repair plan and the production capacity of the production plan offset, the effective production capacity of PTA is about 32 million - 34 million tons / year.

In terms of demand, the growth rate of polyester production in 2013 to 2015 was 8.6%, 2.2% and 9.1%, respectively, with an average value of 6.7%.

Taking into account the slowdown in China's economic growth, assuming that the polyester production growth rate is 5% in 2016, the corresponding PTA demand is about 33 million tons, which is close to the effective production capacity of PTA, and the supply and demand are basically balanced.

In terms of fabric volume, the turnover of long staple fabrics is slightly lower than that of the same period, but short staple fabrics are trading 3 million 380 thousand days on average in May.

As of May 17th, the polyester plant operating rate was 84.7%, an increase of 4 percentage points over the same period last year.

In terms of inventory, the stocks of polyester filament POY and DTY remained stable compared with previous years, but FDY's 16 day inventory was at a relatively low level.

The polyester plant has a high operating rate, while polyester stocks are kept low, reflecting that the polyester market is still in the peak season of seasonal demand, and consumer demand is expanding, which is a certain support for the consumption of polyester raw material PTA.