Polyester Raw Materials Market Rebound, But In The Short Term Is Still Breaking Its Own Pattern.

2.7%! After five days, glycol futures again strong pull up!

In addition to the good performance of ethylene glycol, the polyester raw material market is also booming in recent years.

Crude oil boosted, PTA futures continued to rise for 3 days.

Recently, OPEC and non OPEC major oil producing countries Russia reached a new production reduction agreement, agreed to start from January next year, an additional 500 thousand barrels per day, boosted by this good news, international crude oil to achieve "five consecutive ups."

With the boost of crude oil, the PTA market has rebounded and the futures market has returned to 4800 points. Starting from last Thursday, the PTA rose two days after crude oil and downstream weaving just needed replenishment and polyester production and sales picked up. The price of the internal market rose to more than 4800 yuan / ton.

Until Monday, PTA continued to rally. By the end of the afternoon of 9, the PTA futures contract of Zhengzhou commercial bank closed up, and the main 2001 contract closed at 4820 yuan / ton, compared with the settlement price of the previous trading day, up 28 yuan / ton, or 0.58%.

Tight spot, ethylene glycol futures rose to 2.7%

At the beginning of this week, the futures of glycol futures rose by over 3%, and then the futures of glycol futures dropped slightly. But as of the end of the afternoon, the 2001 main contract of ethylene glycol was closed at 4787 yuan / ton, or 2.7%.

In this year's market, after a short span of five days, glycol futures rose more than 2%, thanks to the low inventory of ethylene glycol ports. In fact, ethylene glycol is basically in a state of balance between supply and demand. However, due to the poor port weather, the closure of ports in eastern China such as Ningbo and Zhangjiagang continues to lead to the delayed arrival of ethylene glycol and the low inventory of its port stock.

At the end of the year, the polyester raw material market seems to be showing signs of recovery at the end of the year. But how long can this market last?

There are more factors in crude oil.

At present, the United States is facing general election and tense political relations. Crude oil, as the source of polyester products, will affect the trend of crude oil. At the same time, as China's largest oil consumer, China's relations between the two countries are tense, which will become a major negative oil.

The action to reduce crude oil production on the one hand is to cope with the possible increase in output next year to some of the world's largest oil producing countries, which are not included in the US production reduction agreement. On the one hand, we need to respond to the declining demand. However, since the joint production reduction began in 2017, the implementation rate has been the biggest problem facing the production reduction operation. Although Saudi Arabia continues to reduce production by 400 thousand barrels per day on the basis of its production quota, Russia's oil production is still higher than that of Russia and the organization of Petroleum Exporting Countries (OPEC) and its oil producing countries. Crude oil supply continues to grow, and the production reduction agreement is only 3 months.

PTA inventory office high

From the supply side, the supply of PTA is still stable: in December 7th, HPG's 2 million 200 thousand ton PTA plant was scheduled for 1 weeks of maintenance, but the 2 million 200 thousand tons PTA device of Hengli petrochemical company has been restarted 6 days, and the 900 thousand PTA of PW petrochemical plant has returned to normal after the loss of 5 yuan last week.

But it is worth noting that at present, the PTA stock is still near the 1 million 266 thousand tons in the year, and near the end of the year, the downstream weaving factories are getting worse because of the bad market. This year, the vacation is earlier. Under the pressure of funds and so on, the demand for raw polyester filament is not strong, the starting rate of polyester will be further reduced, the demand for raw materials PTA will drop, low demand and high inventories, PTA will continue to accumulate inventory, and the rally will not continue.

Lower demand for ethylene glycol downstream

Ethylene glycol is a "dark horse" in the second half of the polyester market. Although the price has continued to decline, the low inventory in recent 3 years has not supported the market for ethylene glycol. At present, the port inventory of ethylene glycol in East China has dropped to below 450 thousand tons. Although the port has continued to have goods to Hong Kong, some ports have closed operations frequently, and the stock has picked up slowly. In addition, the release of the new capacity market is still expected to be delayed, and the supply and output are limited.

But the biggest risk of ethylene glycol comes from the weakening demand. At present, the start-up rate of polyester factories is around 90%, but by the end of the year, according to the usual practice, polyester factories have been reducing production and shutting down operations. 2016 years ago, the polyester plant start-up rate dropped to about 60%; 2017 years ago, the polyester plant start-up rate dropped to 78%; 2018 years ago, polyester plant start-up rate dropped to 73% or so. And after a short period of time, the start-up rate of polyester plant is still not high, and the operating rate is declining to suppress the market atmosphere of ethylene glycol.

It can be seen that whether it is from the macro or micro level, the polyester market is still in the market of intertwined and interwoven market. Under the background of weakening demand, the polyester market will not be able to break its own pattern in the short term.