Contradiction Between Supply And Demand PTA Oscillation Declines

Since April, the main contradiction between PTA supply and demand in centralized overhaul of equipment and the cost of production of PX new plant have been reduced. The 2 risk factors have been released to a greater extent.

Beginning in late April, the 1905 contract and the 1909 contract trend continued to differentiate, of which 1905 of the contracts were affected by big factory prices, and prices continued to rise. 1909 contracts were dragged down by the downward trend of cost and expected demand, and the 05-09 spread widened to 950 yuan / ton.

1905 contracts immediately enter the delivery, centralized maintenance and large factory support price support will also be thanks to the curtain, the far month contract will continue to be from the cost and consumer side of the empty drag, to oscillate down.

From the cost side, the bad part is released.

In the second half of 2018, the PX link monopolized the huge profits of the industrial chain, and the highest price difference of PX- naphtha was close to 700 US dollars / ton, far higher than the normal level of 350 US dollars / ton. However, in 2019, the domestic private refinery equipment will be put into operation one after another, and the high profit of PX will be squeezed, which will become the well-known enemy of PTA.

The bad profit in the 2 quarter of this year, as part of the Hengli refinery plant was put into operation, the PX price dropped from 900 US dollars / ton in March to 900 US dollars / ton, and the PX- naphtha oil price difference dropped from 330 to US $600 in the 1 quarter to 600 US dollars / ton. The corresponding PTA cost center dropped from 5900 yuan / ton line to 4600 yuan / ton, or 22%, but PTA price did not fall synchronously.

At present, the cost side of PX has been released to a greater extent.

The pressure of supply and demand is rising.

In the 2 quarter of this year, the domestic PTA plant once reported nearly 20 million tons of overhaul plan, most of which concentrated for 4-5 months, which triggered a stage of supply nervousness. The PTA price performance was strong. The domestic large production enterprises overhaul, to spot repurchase order spot price continued to strengthen, has obvious role in promoting the contract in recent months.

But in the actual implementation process, some devices were not scheduled to be overhauled. Therefore, the supply and demand of PTA in May may be converted from a warehouse to a small repository.

Since May, the volume of maintenance has dropped. Recently, the Sichuan Shengda 1 million ton plant has a production plan, so the supply of PTA will increase significantly in the middle and late 5 months.

But lower demand performance is weak, and several indicators are reflected.

To sum up, PTA cost surface pressure has been released to a greater extent, but there are still some bad risks waiting to be released in the future. The pressure of supply and demand will continue to drag PTA prices in 6-8 months. PTA still maintains a higher production profit, which means that there will be some downward trend in the future.

At present, the processing of PTA1909 contracts is worse than 1000 yuan / ton. Before September, the cost space is limited, but the supply and demand side will be bad, which may cause the processing error to be over 200 yuan / ton, so the 1909 contract price may return to 5450 yuan / ton low. Compared with the January contract, the bad pressure may be even greater.

From the perspective of price difference structure, PTA will continue to maintain a weak BACK structure.