PTA Is In A Down Call State.

Since last Wednesday, the price of PTA has deviated from the trend of crude oil prices and has fallen continuously.

Before the Spring Festival, the driving force of PTA mainly came from the demand supplement of terminal weaving enterprises and the early promotion of subsequent orders. After the Spring Festival, due to the high processing fees, the sensitivity of PTA to crude oil price changes weakened, resulting in the weakening of the cost side support brought by the rise in crude oil prices.

At the same time, the market has increased doubts about the seasonal regress and sustainability of the orders of the terminal enterprises, and the withdrawal of multiple initiatives has led to a fall in the price of PTA.

The current trend of PTA is not only affected by crude oil factors, but also the order recovery level of downstream terminals.

Cost side support weakened

The recent trend of PTA price deviates from crude oil price, and the high processing fee is the main reason.

From the perspective of supply and demand of crude oil, the supply side contraction is the core driving force. Saudi Arabia is expected to cut production, Russia will accelerate its implementation of the production reduction agreement, and the domestic situation in Venezuela is turbulent, making the supply surplus in the early stage greatly improved, thus driving up the price of crude oil gradually.

Because of the difference between the current PTA-PX price of 850 yuan / ton, PTA processing fee is maintained at more than 600 yuan / ton, so the PTA high processing fee will weaken the support of crude oil to PTA price. Whether the support effect can be resumed in the future depends on the level of crude oil price rise and the change of PTA processing fee.

If crude oil prices continue to rise, PTA or early price adjustment.

In addition, with the gradual commissioning of private refinery, the domestic PX production capacity will be greatly released. The market generally expects that the tight supply of PX will slow down after May, which will also weaken the support for PTA.

Device restart to increase supply

In terms of PTA installations, recently, Fuhai second tier 800 thousand PX is currently running at full capacity. The 4 million 500 thousand ton PTA plant plans to increase its load to 80% in February 13th. The 1 million 400 thousand tons of Hua Bin petrochemical plant has been stopped since January 26th and will be restarted in late February, so the supply increment in mid and late 2 months is more clear.

Since the beginning of this year, the PTA load has been above 85%, and is at a high level in the past 5 years.

CCF statistics show that last week's five PTA load was 93.45%, a record high, and the tight balance between supply and demand was reversed.

Before the Spring Festival, PTA had a small library. After the Spring Festival, the social stock rose to about 1 million 200 thousand tons.

The author expects that seasonal supply and demand factors will prompt PTA to accumulate in February, and the earliest to go to the library in mid March.

High load and heavy storage make the PTA current base shrink continuously near the level water, which can not support the futures price in 2018.

Focus on order return growth

With the restart of the pre maintenance device and the replenishment of the terminal before the Spring Festival, polyester has entered the storehouse stage.

Historically, the stock of pet products usually has an increase of 4-5 days during the Spring Festival.

On the terminal side, before the Spring Festival, the weaving and blasting enterprises were fully stocked with the demand for restocking and advance orders. Some of the raw materials had been stocked for 20-30 days, and even raw materials were stocked for more than 45 days.

As the factory begins to return to work in large numbers next week, the growth and sustainability of the seasonal return of subsequent orders are the focus of the market, which will directly determine the changes in the inventory of polyester and PTA, which will affect the price.

For the future terminal consumption is still more optimistic.

This year's domestic fiscal policy and personal tax policy reform will help stimulate the consumption potential of residents, and is expected to promote clothing consumption and help the industry recover.

Therefore, in the medium to long term, the downstream can still support PTA to go out of the rising market.

To sum up, the terminal orders are not well expected and the industrial chain is accumulated, resulting in a short term pullback in the PTA.

In the medium to long term, the terminal demand is optimistic, which can support the PTA price rise. It is suggested that investors should focus more on the callbacks.