The Spring Festival Is Coming, And The Market Is "Cooling Down".

Recently, affected by the rebound in international crude oil prices, the long and quiet commodity market seems to be showing signs of recovery in the near future.

Crude oil, which is regarded as "industrial blood", plays a leading role in the downstream petrochemical industry. However, the large fluctuation of crude oil often affects the trend of chemical products in the short term. In the long run, the fundamental factor that determines its price is still essential. From the basic point of view, as the downstream weaving Market usher in the Spring Festival holiday, polyester factories enter the stage of accumulated inventory cycle. Before the festival, the PTA "red envelope" market is hard to maintain.

Polyester and weaving Market "cooling" obviously, demand is hard to support the market to go higher.

Judging from the current demand side, the weaving Market is "cooling down" obviously, there are not many orders, factories are opening annual vacation, traders will have a rest before the end of the month, and the market has entered the "empty window period".

As of January 22nd, Changshu, Changxin, Haining and other places started to decline to 1-2, and Shengze started to decline to 5-6.

Now the terminal manufacturing operation rate has declined. With the arrival of the holiday nodes, the construction of the market in Jiangsu and Zhejiang will continue to decline. It is expected that after January 25th, the overall market operating rate will drop to around 20%, and there will be a big shutdown in the Spring Festival.

Due to the relatively high volume of labor in the downstream of PTA, there has been a general trend of labor shortage after the Spring Festival, which basically needs to be resumed after the first month. In addition, after the Spring Festival's rise, at least half of the inventory in the downstream industry of PTA will not need to rush to purchase raw materials after the holidays. After the Spring Festival to the end of the festival, there will be a phenomenon of downstream storage. There is pressure on capital and inventory, and there is an empty mood for PTA.

The recent PTA shutdown capacity is not much. A large company had been shut down for one or two months before it was restarted last week. At the same time, downstream enterprises also had downtime overdue, but because of the rebound in crude oil and PTA prices, the downstream sales situation has improved, and the inventory decline has accelerated. But at present, polyester is still in shutdown, the operating rate has dropped to 79%, PTA operating rate of 81%. So supply has increased, demand is weakening, fundamentals are not very optimistic.

Short term speculation factors, the probability of a year ago will fall reaction.

In addition, from the perspective of supply, chemical enterprises in the past year have put in new capacity, and this year there are new enterprises to put into production. These production is not only oil products, but also downstream chemical products, and the production capacity of PTA will see the turning point of supply and demand balance. In the past few years, the price of PTA and ethylene glycol is relatively strong, and the price is relatively strong. The supply will increase significantly this year.

So this wave of chemical market will be short-term speculation factor, the duration will not be too long. It is expected that the increase will be controlled within this week.

Market participants believe that the upward trend of crude oil prices in the near future will play a leading role in the downstream chemical industry. For the next crude oil price, the industry believes that the recent decline in oil prices and OPEC and other macroeconomic benefits will continue to rebound. The market risk sentiment has been improved, but the negative factors can not be ignored. The market is worried about the global economic slowdown.

The API report was neutral, and Russia's crude oil output hit a record high in December last year. In the short term, the rebound in oil prices is expected to continue, but there will be strong resistance after the rebound. Therefore, crude oil does not support the bull market in commodity markets.

Overall, the recent increase in PTA and ethylene glycol is considerable, but the increase in this product will not be too long. The increase in global economic uncertainty has led to market divergence, coupled with low market confidence. A good start does not mean "red all year round". In 2019, the overall expectation of the commodity market is still weak. The market is expected to have more callbacks before the year. PTA is still in the storehouse stage, and the market is still under pressure.