How Can PTA "Repeat Pet" Come Up After Four Consecutive Rises?

Up, up, up, PTA main contract rose four days, giving the market a lot of daydream. In fact, since entering the June, the domestic PTA device has been frequently overhauled, and downstream weaving has entered the market of raw materials. The market mindset has changed quietly, and the trend has changed in May. With the upstream PX being more productive and put into operation, it is in the traditional way. Spin Can the PTA rally continue in the off-season clothing consumption?

Multiple profits and many factors resonate PTA's rise is fierce.

The day's market rose and then rose. Yesterday, the PTA intraday oscillation up, up 44 yuan / ton reported at 5618 yuan / ton, or 0.79%; night plate after a strong pull up slightly down, and finally to 1.11% increase to close at 5648 yuan / ton. Since the beginning of this week, the PTA main contract has risen 414 yuan, or 7.9%.

"PTA's rise in recent days is the result of the resonance of four factors." Guo Ping An Xin futures Senior analyst Pang Chunyan said that one was the centralized maintenance of domestic installations in mid June, the two is the raw materials for the bottom of the weaving plant, three is the easing of Sino US relations, and the four is the stabilization and recovery of crude oil prices.

As a matter of fact, in mid June, domestic installations were frequently overhauled, coupled with the devices in the same period and the devices to be stopped at the same time. Recently, a total of 12 sets of equipment had been cut down and planned to stop production, which led to the market's short-term supply worries. "But most of the devices are short term parking, Yizheng. chemical fiber The parking facilities of Taihua Xingye, Ya Dong petrochemical and Hon Bang Petrochemical Company are limited for 2-3 days. The parking time is mainly 900 thousand tons of Peng Wei petrochemical, 1 million tons of Sichuan energy, 2 million 200 thousand tons of constant power, 2 million 250 thousand tons of Yisheng, 4 million 500 thousand tons of Fuhua chemical industry and trade, and 2 sets of Sinopec's parking facilities. From the overhaul plan, most of the devices will resume production at the end of June, especially when the PTA processing fee is back to 1500 yuan / ton, driven by high profits, the production enthusiasm of PTA will be relatively high. Today, the news of the new 2 million 200 thousand metre installation of new Feng Ming is planned to go into operation in September. Pang Chunyan said, therefore, the overhaul of equipment is more profitable. With the increase of processing fees and the recovery of production enthusiasm, the supply of PTA will increase again.

"Overhaul of equipment has become the focus of short-term market speculation, and the short term market has left the field voluntarily, and the PTA price rebounded by over 2%." Wei Lin, chief futures analyst, said.

In addition, the second driving force that led to the rise in PTA prices is the raw materials for the bottom of the weaving plant. "Polyester production and sales rebounded recently, leading to a substantial improvement in polyester stocks, and polyester started to pick up again. Polyester's performance in the off-season is not as weak as expected. " CITIC futures analyst Xu Li said.

Pang Chunyan said that since the end of May, the price of polyester has dropped to the lowest level in the past two years, and the weaving factory has been diving into the market, resulting in a huge volume of polyester production and sales. As a result, the stock of polyester factories has dropped rapidly, and has dropped to the lowest level in recent years. After the release of the pressure on the stock of the polyester plant, the profits of the enterprises improved and the enthusiasm of production resumed, so the load of polyester industry continued to rise, and the prices of raw materials were boosted. "But at present, weaving mills are only buying at low prices, and actively processing raw materials. The key to the future is orders. If the order situation is not optimistic, these raw materials will eventually be spanformed into inventory accumulation in weaving factories, and become an important factor restricting the continuous rise of raw material prices. Conversely, if the order is better, the inventory of the weaving mill is going smoothly, and the profit of the consumer side will continue to boost the PTA price. Pang Chunyan said.

The third driver is the easing of tensions between China and the US. The first telephone call of the US dollar made the market again hope for the Sino US trade negotiations, and the macro tension was obviously eased. This has a marked boost for PTA. "If the tension between Sino US relations is intensifying, a new round of tariff pressure will be faced in the future, which will directly affect the PTA terminal's textile and garment market. The sustainability of the profits will ultimately depend on the progress of Sino US trade negotiations. " Pang Chunyan further explained that the relaxation of Sino US relations was restricted by the market thinking that the remaining 300 billion dollar punitive tariff policy might not be implemented, which directly benefits China's textile and garment market. Because the United States is an important export place for Chinese textile and clothing, once the tariff increases, it will affect some Chinese textile and clothing exports to the United States. The easing of Sino US relations may lead to some favorable export orders in the short term.

In addition, crude oil prices have stabilized and picked up, which also has a direct boost to PTA. "Cost, after the PTA processing fee fell, the sensitivity of the oil price trend increased. After the price of crude oil stopped, PTA's drag from the cost side weakened, and then stabilized was a big probability." Xu Li said.

"The main reason for the increase in crude oil prices is that the tension between the US and Iraq is pushing up the geopolitical risk premium, and the macroeconomic stimulus of the Sino US trade situation is easing, and the latest US EIA crude oil inventory data is all positive." Wei Lin said.

In June 13th, two oil tankers attacked near the Strait of Hormuz in Oman Bay, causing the market to worry about the impact of crude oil supply and the warming of the geopolitical crisis in the Middle East. The international oil price rose by 4%, and the whole chemical sector was boosted. At present, Iran threatens to reduce compliance with the Iranian nuclear agreement and will break through the upper limit of 300 kilograms of enriched uranium stock. In June 19th, foreign media reported that the Iran Revolutionary Guard brought down a US drone into Iran's airspace. The news exploded the market's further concern about geopolitical conflicts, and oil prices rose by 3%.

In June 18th, the leaders of China and the United States exchanged telephone calls, and trade tensions were expected to ease at a time. U.S. oil rose 4.6%, the biggest gain in 5 months. In addition, OPEC+ decided to hold the OPEC Conference on 1-2 July. The conference may discuss extending the reduction to the end of 2019.

In the week of June 14th, US EIA crude oil inventories fell 3 million 106 thousand barrels, and expected to be reduced by 1 million 77 thousand barrels. U.S. gasoline demand rose to a record high of 9 million 928 thousand barrels per day. Gasoline inventories recorded a 1 million 692 thousand week decline after 4 consecutive weeks of growth, the lowest in nearly 8 weeks. Last week, crude oil production in the United States dropped 100 thousand barrels to 12 million 200 thousand barrels per day. The EIA crude oil inventory data in the US are all good, which makes the market look forward to the peak season of oil consumption in 7-8. However, market participants say that the duration of the drive depends on the trend of crude oil market.

"Overall, at present, some short stop maintenance PTA devices have been restarted, Hengli and Fuhai create two sets of equipment maintenance effect will continue until July, contribute to the actual supply shrinkage. Crude oil, the U.S. EIA stock turning point will appear, will be strong support for the 3 quarter of oil prices, followed by concern about the persistence of EIA inventory changes. The cost side is mainly due to the expected launch of the PX new plant in July, or the PTA rebound will be limited. In the next two weeks, the G20 summit and the OPEC+ conference will be held in succession, and the macro level factors will dominate the short-term market. Wei Lin said.

PTA processing is poor or phased narrowing

"PTA prices are recovering after a bad return. In addition, the PTA tends to rebound, but it is continuous or limited. Xu Li said that PTA is expected to have more short-term trend in the near future before the new factor of the impact of the gap is taking place. However, in the medium to long term, the weakness of supply and demand pattern is still the source of the pressure of PTA trend. "The absolute price of PTA is affected by cost, and in terms of cost, PX price should not rebound for a long time, and supply and demand loosely restrict the trend of price. In the later stage, we need to pay attention to whether the peak season is ahead of schedule. Because the off-season has been ahead of schedule, if the peak season is ahead of schedule or the off-season is not bad, it will be good for polyester. In addition, the supply side should pay close attention to the production capacity of PTA new Feng Ming. She said.

However, news came out yesterday that the 2 million 200 thousand ton PTA plant of Zhejiang Dushan Energy Co., Ltd. (new Feng Ming Group Investment) is scheduled to go into operation in mid 9 in 2019. If the production time is September, it will not be bad for the current main contract 1909.

In Pang Chunyan's view, the future supply side of PTA is more definite, mainly focusing on the repair schedule of several planned maintenance devices. However, there is a big uncertainty in the demand side, which is mainly whether the terminal orders can be improved, so that the products of the weaving factories can be successfully digested, which determines whether the consumption level can be improved. In addition, the uncertainty of crude oil and macroscopical surface is still large and should be closely watched.

While the supply and demand pattern has changed, PTA industry chain profits have also been rebalanced. "At present, the profit of PTA industry chain is spanferred from upstream to middle reaches." Wei Lin said that the 7 month middle run Hongrun 800 thousand tons PX plant was planned to go into operation, the PX price pressure dropped, and the PX- naphtha oil price difference reduced to 326 US dollars / ton, which was near the break even point. The price of PTA device is rising during the period of overhaul, the market mentality has been boosted, the enthusiasm for downstream stocking has been stimulated, polyester production and marketing has been continuously hot, polyester products inventory has been digested, PTA marginal supply and demand has improved, and PTA spot processing has expanded to 1500 yuan / ton. The downstream polyester cash flow has not improved significantly, mainly due to the lack of terminal orders to follow up, polyester stock to terminal manufacturing spanfer, price downward conduction limited.

"In the second half of the year, a number of new PX installations will be put into operation. The price of PX will remain weak, and the price of PX- naphtha will remain low. Under the background of macroeconomic slowdown, terminal consumption is unlikely to improve significantly in the short term. The negative feedback from terminal will be spanmitted to the downstream. The polyester link is still expected to exist, and the cash flow of polyester can hardly be greatly improved. PTA supply and demand are relatively healthy, and high processing fees will remain. But in September, new Feng Ming 2 million 200 thousand tons PTA new device was planned to be put into operation, PTA processing was poor or phased narrowing. Wei Lin said.