Cost Support Is Strong, PTA Will Not Fall Sharply After Spring Festival.

Since the new year's day, with the rebound in the crude oil market, PTA has launched a wave of sharp rise. As of now, the 1905 price of the main contract has rebounded by 15%.

In the short term, PTA prices will not drop due to lower polyester stocks in the lower reaches.

As the whole industry chain was recovering, the average operating rate of PTA plant in 2018 increased by nearly 6% compared with 2017, and the increase in demand raised the PX price.

In the second half of 2018, the overall industrial chain market fluctuated sharply, and the average PX processing fee was still 542 US dollars / ton.

Since January 2019, with the strong rebound in international oil prices, Asian PX prices have returned to 1000 US dollars / ton, and the PX - naphtha oil price difference has expanded by 103 US dollars / ton compared with the beginning of the month, and the profit has reached 286 US dollars / ton.

In terms of installations, Fuhai 800 thousand PX plant was put into operation in late 2018, and the remaining 800 thousand tons of capacity will be released after the Spring Festival this year.

In addition, the new PX capacity planned for 2019 totaled 12 million 600 thousand tons, most of which were integrated devices.

However, these production capacity basically needs to be formed in the second half of this year, and the short-term PX price is expected to remain high.

After the launch of Fuhai PX plant, its 4 million 500 thousand tons PTA capacity was originally planned to increase from 80% tons to 2 million 250 thousand tons in late January, reaching 3 million 600 thousand tons.

However, due to the recent failure of its PX device, the restart time of the PTA device has been delayed until mid late 2.

In the first half of this year, only 1 million tons of Sichuan Shengda plant was released. In recent years, although the new petrochemical and Yisheng petrochemical units have been restarted, the 1 million 400 thousand month maintenance of Huayin Petrochemical Company will be able to offset the negative impact of some capacity increase.

At present, PTA inventory is basically on the low level of 3 to 4 days. Even during the Spring Festival, the overall supply pressure of the market is still small.

Since the beginning of this year, besides the filament POY floating on the cost line, other varieties have a good profit margin. Under the relatively abundant fund background, the repair time of polyester plant has been delayed, prompting the rebound of PTA market.

From the perspective of the industry chain, the biggest hidden danger in the future market is the heavy storage of the polyester market after the Spring Festival. However, with the improvement of polyester production and marketing in recent years, polyester stocks have dropped rapidly from the high level since the second half of 2017. In just two months, the stocks of polyester filament POY, FDY and DTY dropped to 3, 4 and 8 days respectively, representing half of the inventory level in the same period last year.

From this point of view, even if the polyester factory is stored in the late stage, the lower inventory level will also prolong the storage period, thus weakening the negative impact of the increase in polyester stocks after the Spring Festival.

In short, the strong PX market will continue to strongly support the formation of PTA prices. While PTA supply is increasing but limited, and the downstream demand is good, the probability of PTA falling sharply after the Spring Festival is not great.