PTA Logic Has Not Changed Much, The Future Market Continues To Bullish.

After continuing to rise and fall after the Spring Festival, the PTA price is facing a strong suppression of the 6000 yuan / ton integer pass. Under the background of high disk profits and industrial hedging, the high price of the Yisheng Ningbo plant has been stimulated, and the price of PTA has been reduced by nearly 300 yuan / ton.

We believe that the logic of PTA is still unchanged.

Since the end of November last year, OPEC non OPEC countries have reached a reduction agreement. The market has always expressed doubts about the execution of oil producing countries. After all, the implementation of production cuts is not ideal.

But from the recently released IEA and OPEC monthly data, it seems to dispel the market's previous worries.

According to OPEC statistics, the 11 Reuters members have contributed 93% reduction in production in January. The International Energy Agency (IEA) also expects that the implementation rate of OPEC reduction in January will be 90%, which has set a record in January.

OPEC and non OPEC oil producing countries are cutting output according to the agreement. Shale oil production in the US is unlikely to return in the short term, and the supply and demand structure of crude oil is improving to support the stabilization of oil prices.

In addition, the current US and Iran Geopolitics

The rise or continuation of oil prices has boosted oil prices.

It is expected that the first OPEC conference in 2017 will be held in late May. From the current market signals, OPEC is inclined to extend the implementation date of the yield reduction period for another 6 months, regardless of the final outcome. Until then, the extension is expected to support oil prices.

Overall, crude oil prices are likely to rise or fall in the medium term.

1 quarter Asia

The supply is adequate, and the average Asian PX device in the 1-2 month is 79%, which is absolutely high since 2015, and the domestic PX stock is also in the high level in the past two years.

Although supply is surplus, PX processing profit is rising. The PX- naphtha oil price difference has rebounded from the US $340 / ton in the middle of January to the current US $400 / ton. Although PTA has maintained the demand support factor for high load, the tightening of supply in the PX2 quarter is expected to play a crucial role.

In the 2 quarter of this year, the Asian PX plant will have a peak of maintenance, involving nearly 8 million tons of PX capacity, and 18% of Asia's total PX capacity (including the Middle East). The volume of maintenance in the 2 quarter of 2015 and 2016 is only about 4 million 500 thousand tons.

Moreover, the 1 million 400 thousand tons PTA unit of Hua Bin has a greater probability of resuming production in May, and the early preparation of raw materials will aggravate the tight supply level in the PX stage.

In short, PX late supply tightening expectations strong, PX- stone brain oil price difference still has potential to continue to expand.

In 1-2, affected by the Spring Festival in China, the supply and demand side of PTA was relatively weak, and its inventory accumulated around 350 thousand tons. The main reason is that this year's polyester factory's shutdown is less than that of previous years, and it just needs to consume part of its inventory.

As of the end of February, domestic PTA social inventory is expected to be around 185-195 tons, and the overall inventory pressure is not large.

It is initially estimated that the average load of the PTA plant will be around 75% in March. It is estimated that the polyester load will increase to 86% near the end of February and the supply of PTA will still be excessive.

However, considering the demand for non polyester and the demand for spare parts in the first half of the year, the supply performance of PTA is tight, 3-4 months.

The approximate rate is in the out of stock pattern.

From the actual operation of polyester enterprises in the past years, as of last week, the polyester load increased to 83%, and it is expected to increase to 86-87% at the end of February. The 3-5 month is the traditional peak season for polyester demand and strong support for raw material demand.

In view of the new plant commissioning plan, 3 sets of 1 million 150 thousand tons of flake production capacity are expected to be released in the first half of this year, and the increase in demand will slow down the pressure on PTA stock production capacity.

Overall, the cost side support is expected to go well, entering the March supply and demand side of PTA has been better than expected, continue to watch PTA prices.

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