Straight Dive! Who "Directed" PTA Down This "Drama"?

Yesterday, PTA's main contract fell 1909 straight in the afternoon and ended at the limit. In the near future, based on the tight supply and demand, there is a fierce and stalemate game between the multi parties and the short profit margins. Yesterday, the "war" and the short term ushered in a stage victory.

Cost collapse, PTA down

It is understood that the main reason for the sharp fall in the PTA main contract is the collapse of upstream raw material PX. The decline of PX has driven the PTA valuation down. PX fell sharply at noon yesterday, and the actual spanaction price in July was as low as 961 US dollars / ton. The sharp decline of PX for two consecutive days has shrouded PTA in a bad atmosphere.

"The price of PX is $1068 / ton this Monday. The offer price was $961 / tonne at noon yesterday. We could see that it fell by more than 100 US dollars / ton. In the two days, PX fell by nearly 76 US dollars / ton. Such a large fluctuation is not common, and the constant force is no longer very high." Ke Meng, vice president of Fu Neng Futures Research Institute, told futures Daily reporters.

According to the futures Daily reporter, recently, the Korean SK Inchon 1 million 300 thousand tons PX device was restarted in advance, the device load increased to 70% to 80%. After April 16th, the original plan was overhauled for 10 days. Now the supply has been recovered unexpectedly, and the price of PX and downstream varieties has been suppressed.

As a matter of fact, PX is generally discussed by the top and bottom merchants. "The general theoretical price is 50%ACP+50% spot price plus water discount. Among them, ACP refers to the Asian contract price. Bank of China International Futures researcher Cao Qing said that yesterday's PTA main contract diving was mainly caused by the emotional impact of the sharp fall of PX, but now the market sentiment is relatively empty, it is a volatile atmosphere. "PX dropped a lot from Wednesday to yesterday, and there was a single lower than expected price at noon, because it was far away, and the price was relatively low, so it looks a little scary, and it has some influence on the mood." She said.

As the direct raw material of PTA, the price trend of PX will directly affect the price of PTA, especially in the change of cost. PX showed a decrease of 100 US dollars / ton, which is equivalent to PTA production cost reduced by more than 500 yuan / ton.

"Judging from the valuation of forward 09 contracts, this fall is a reasonable valuation. The previous price is overvalued. Based on the PTA inventory forecast, it has given some premium, but the timing of the start is rather unexpected. Originally, we believe that there is no excess supply of PX short term, and the price should come later." Fuhua chemical industry and trade (Zhangzhou) Co., Ltd. PTA Sales Manager Qin Hao said.

In addition, according to industry analysis, the cost of raw materials PX has dropped sharply in the past two days, coupled with the high processing cost of PTA itself, and the greater degree of industrial guarantee. It has also become one of the reasons why the main contract price of PTA has declined considerably. "The short selling hedging of PTA enterprises can also be regarded as the PTA factory's initiative valuation reversion action." Industry sources said.

At present, the PTA processing fee is considerable.

Under the background of low inventory, PTA manufacturers have strong bargaining power, grasp the initiative of profit distribution in the industry chain, and the profits brought by cost collapse should mostly fall into the PTA plant link. At present, the profit of PTA industry chain is facing redistribution, which is relatively determined. We can see that in the current price, the upstream has already spanferred many profits to PTA.

"At present, the processing fee of PTA has basically maintained a high level, around 1200 yuan / ton, except for the three quarter of last year, which has been the highest level in recent years. In fact, this is a mentality of upstream and downstream games. Now the price difference of PTA processing is very high, so the enterprise will produce enough effort. So the market will think that there will be a more adequate supply in the future. Cao Qing said, in addition, in the past it was difficult to have such a high processing price difference, so in the futures market, we always have a return to the average mentality. Therefore, once we see the processing price difference far above the average level, we will habitually think that we should be short. This is why there is more risk in the high processing price gap, and the shorter the atmosphere will be.

In the context of high profits, is it the change of cost or the change of supply and demand in the dominant price trend? In Cao's view, cost and supply and demand can not be separated from each other. "Most of the pricing models of industrial products are pricing of cost plus processing price difference. As for the influence of cost, or the influence of supply and demand, it is related to processing price difference, and market sentiment. " She said.

"Cost and supply and demand will have an impact on prices. When the price difference is very low, for example, the profit of PTA is relatively thin, the effect of a small change in cost will be very obvious. When the processing price difference is relatively large, in fact, the price control ability of enterprises will be slightly stronger, and the adjustment space will be larger. So some people say they are pricing their own supply and demand. But I do not think it will look at supply and demand. Because the fundamentals of supply and demand are not changing every day, and PTA, as a very active and mature futures market, we have many operations in the futures market, and many times the market expectations, upstream and downstream dynamics are still highly linked. Cao Qing said.

The trend is not yet clear.

Market participants all said that although the PTA's early forecast of the market slump is a reasonable valuation, whether there is a downward trend in terms of the trend, there are still uncertainties. We should pay close attention to the game between the two sides.

"It is still difficult to determine whether PTA has a downward trend. One is to focus on PX prices and oil prices. The second is concerned about downstream demand. We judge that the center of gravity of the price in the second half of this year must be downward. Not only is there a sharp increase in the supply of PX, but also the supply of PTA will start to increase. But in fact, PTA has fallen too fast. At present, the fundamentals of the spot market are not too bad. If we want to go out of trend, we still need PX or oil prices to continue to fall, or downstream demand will weaken. At present, PTA's inventory is not high, and demand is also good. We tend to think that there is still room for gaming. " Cao Qing said.

"In the past May is the PTA factory centralized maintenance time, they will be very expensive through maintenance. Now the processing fee of PTA is at a high level, and the profit space is larger. Therefore, PTA plant has higher production enthusiasm, and there may not be any overhaul actions in a short time. In the view of Ke Meng, the trend of PTA price changes in late stage should also be concerned about the spread of crude oil, MX and PX. "If PX continues to fall, PTA may also fall. But do not look at the absolute price, but look at the difference between the middle and lower reaches, and judge the trend change through the relative price difference. In the previous stage, the price difference between naphtha and PX was very large, which was about 600 to 700 yuan per ton, and now it has gradually returned to a reasonable position of 400 yuan / ton, and whether the price difference of 400 yuan / ton later will continue to be compressed, which is also the focus of attention. Ke Meng said.

In the view of Ke Meng, the probability of partial oscillation in the late stage of PTA is larger. "From the downstream load point of view, this year's load is lower than the same period last year. The recent production and sales rate of downstream demand is not very optimistic. In addition, the valuation of the short term PTA has been expected, and the bears may make a profit. Then came the stage of the game.

The point of disagreement in the market is that the PX valuation is given. If the PX NAP processing gap in September is about $350 / ton, based on the current crude oil stability, the price of PX will be between 930 and 940 US dollars / ton, which is also an important basis for our early valuation of PTA09 contracts. If the processing fee of PTA1500 yuan / ton is given, the corresponding price is 6250 yuan / ton, then the price of 6300 yuan / ton will be overestimated. If the processing fee is PTA1000 yuan / ton, the price corresponding to PTA is 5750 yuan / ton. If there is no big drop in crude oil, in the short term, if the PTA09 contract falls to around 5900 yuan / ton, it may have the value of short term. Another assumption is that if the price difference between September and PX is expected to fall to $300 per ton in September, then the cost of PTA09 will move down another 250 yuan / ton, corresponding to the PTA price of 5500 yuan / ton. Of course, the judgment of PX valuation is biased towards the former PX NAP compression of 350 US dollars / ton, mainly due to the centralized maintenance of PX in the current two quarter and the uncertainty of Hengli PX's commissioning.