Polyester Production Remains High, Garment Production Continues To Weaken

Last Wednesday, due to outflow of funds, PTA fell sharply, but compared with other chemicals, PTA's performance in recent years was relatively down.

In the short term, due to the high operating rate and better demand in polyester industry, PTA will not be able to fall sharply.

On the one hand, due to the lack of profit in the industry, the price compression space is limited, and in the 2016 commodity rebound market, the increase is relatively backward, so there is not much room for further decline.

On the other hand, the low performance of the polyester industry, the high rate of opening up and the drop in prices of repurchase restrictions for suppliers in the market.

Therefore, short-term PTA will continue to oscillate, but as the Spring Festival approaches, terminal demand will continue to decline.

Also will gradually decline, PTA may be weakened.

As the market expects the global crude oil supply will decline significantly in the first quarter, the recent high oil price oscillation, but the market is sceptical about the implementation of frozen production and production reduction.

The market generally believes that the cashing rate of OPEC is 60%, while Russia is likely to change at any time, and the rise in oil prices will directly stimulate the increase of shale oil output in the United States.

Therefore, international oil prices are unlikely to rise substantially on the basis of the current first quarter or maintain high volatility.

In addition, the price of naphtha continued to rise in recent years. PX prices fluctuated at a high level, and PTA processing costs fluctuated at 500 yuan / ton, matching with the current market structure.

In the first quarter, raw material prices or high oscillations represented by crude oil, the PTA processing cost was limited, so PTA closed down.

In the second half of 2016, polyester industry performed better, and polyester stocks continued to decline.

Among them, in the middle of December, there was a general situation of zero inventory or even out of stock in the middle of December.

The latest data show that polyester POY and FDY mainstream stocks for 4-10 days, polyester DTY mainstream stock for 6-12 days, is still at a low level.

Although polyester sales are weak, the enthusiasm of the polyester industry has not been reduced. Lower inventory and better cash flow make the polyester industry maintain production until the Spring Festival.

Due to better demand constraints

Last week, with the fall in prices, the enthusiasm of the polyester industry to buy on the spot has obviously recovered, but the production of textile and clothing has been greatly weakened.

According to Zhuo Chuang's latest data, the load of Jiangsu and Zhejiang looms dropped to 55%.

Previous years data show that during the Spring Festival, the load of Jiangsu and Zhejiang looms will generally drop below 30%, and the minimum may fall below 10%.

As the Spring Festival draws near, the product inventory of polyester industry will accumulate to a certain level, and the device with maintenance plan will stop one after another, and the demand for PTA will also fall synchronously.

Therefore, short-term PTA does not have the conditions for a sharp fall, but as the Spring Festival draws near, prices will gradually become weaker.

Once the decline, polyester industry procurement and supplier buyback action will play a strong supporting role for PTA, but as the Spring Festival draws near, the factors supporting PTA will be weakened, prices will oscillate or fall to a low level.

However, considering the good market fundamentals, the fundamentals of the Spring Festival are warming up with the rise of polyester and loom loads.

Or rise again, so consider phased bargain buying.

The main risks in the future lie in the commissioning of the devices such as Peng Wei petrochemical, Hua Bin petrochemical, Xiang Lu petrochemical and Sichuan Shengda.

At present, the PTA market is in a temporary equilibrium. Once a few new and old installations are put into operation, the supply surplus situation will hit the market once again. After the phased balance is broken, fierce competition may lead to a downward pressure on PTA again.

For more information, please pay attention to the world clothing shoes and hats net report.