PTA Is Tied Up By Demand. Later Trend Or Fear Is Fierce.

Recently, PTA has been widely concussion, and the spot market is still selling at a very high price. In addition, production and marketing of downstream polyester factories are still in the doldrums, and there is no improvement in terminal orders. Pet factories have accumulated inventory risks. If the polyester factories increase production reduction later, the demand for PTA will be weakened and the PTA market will be weakened. In the absence of new favorable news, PTA trend is much more dangerous.

PX trend is not optimistic.

In the short term, in the case of refinery plant operating rate gradually rising, there is limited space for crude oil to fall for a short period of time, and the rate will probably stabilize. In terms of PX, the start-up rate of the new plant is expected to increase rapidly. Specifically, the Sinopec Hongrun 600 thousand ton / year installation plan will be put into operation in 6-7 months in 2019. Hengyi Brunei 1 phase 1 million 500 thousand ton / year installation plan will be put into operation at the end of July 2019. The 1 phase 4 million ton / year installation plan of Zhejiang Petrochemical Company will be put into operation in August 2019. The 2 phase 1 million ton / year installation plan of Hainan refining and chemical plant will be put into operation in August August. Therefore, the price of PX is not optimistic when new installations are put into operation.

Device maintenance and reboot coexist

This week, the domestic PTA plant maintenance and restart co-exist, and Fu Hai Chuang 4 million 500 thousand tons / year installed in July 9th for 14-20 days of shutdown and maintenance, 325 thousand tons of Luoyang Petrochemical plan is restarted in mid July, 2 million 200 thousand tons of Hengli 2 million 200 thousand tons plan for the next 15 days, Yizheng chemical fiber 350 thousand ton plant plan 15 July began to repair 40 days.

There will be a marked decrease in the supply of PTA during the repair and maintenance of Fu Hai Chuang plant. As of last week, domestic PTA load dropped 9.7 percentage points to 89.6% compared with the previous week, and short-term spot liquidity remained tight.

Downstream terminal into deficit area

In terms of demand, the scope of production and shut-down of polyester enterprises is still expanding. The polyester enterprises will continue to decline during the week. The market order has not yet been significantly improved due to the orders of the terminal enterprises, and the order of the terminal weaving has not obviously recovered before and after the trade war, so the production rate of polyesters will remain at a low level.

In addition, polyester remained light on the weekend, and there was a loss in production profits. Once purchasing is bad, the possibility of loss will be greater. So in general, the demand side is still not improving.

To sum up: the cost side PX7 month foreign devices in July overhauled more, but Shandong Zhonghua Hongrun last week trial run, this week PX is expected to produce products to the market. Cost side adjustment is the main factor; demand side, downstream polyester production and marketing is not good, terminal grey cloth inventory is too high, PTA is expected to run in a short run in the short term. Reference interval 5750-6250. (source: futures daily, pioneer futures)