High Inventory, PTA Market Rise Limited

Introduction: In recent years, the PTA Market undercurrent surging, terminal demand continues to spread good news, while raw material PX price difference has recovered, and short cycle PTA shows to be out of stock. Under the frequent news, PTA market growth is still limited. In the case of high inventory, the market mentality is still cautious.

Market Overview:

In the near future, PTA market growth is limited and fluctuates slightly. From the cost side, overseas public health events are still serious. The continued downturn in the global aviation industry makes the market worry about the prospect of fuel demand. In addition, the decline of commercial crude oil inventory in the United States is lower than expected, and the international oil price slightly moves down. However, the overall support of PX is still at a low level. In terms of supply and demand, PTA xinfengming phase 2 was successfully put into operation, while Hengli Petrochemical line 2 was overhauled, and the supply side declined. In terms of demand, the production and sales of polyester products were flat at the beginning of the week, only some polyester enterprises in the middle of the week were affected by low inventory, and the prices showed an upward trend, and the production and sales showed a short-term improvement, and the overall level was flat. There is no big fluctuation in the operation of polyester plant, and PTA is required to be rigid. Generally speaking, there is no upward driving force at the short-term cost side, and the continuity of downstream terminal orders still needs to wait and see.

Supply side: Hengli Petrochemical line 2 was shut down for maintenance within the week, and xinfengming phase 2 was put into operation successfully with a load of 50%. According to Longzhong Statistics (20201016-1022), PTA output is 922100 tons. Hengli and Yizheng units are expected to restart at the end of next week. Dushan energy PTA plant is expected to be put into operation on the 20th with half of the load, and the output is expected to be 938600 tons next week.

Demand side: in terms of polyester, the early production reduction and the restart of maintenance factories, such as Haixin and saisheng, were superimposed on the improvement of daily production of polyester industry brought by the production of new production capacity. Polyester output continued to increase in the national week, with a slight increase compared with last week. According to Longzhong information statistics (20201016-1022), the weekly output of polyester industry is 1093600 tons. Next week, the expected plant change is limited, and the weekly output is expected to be 1.0969 million tons

Future forecast:

On the whole, terminal demand still stimulates the market, polyester load is expected to remain high in the short term; supply side production and maintenance coexist, and periodic supply and demand changes may affect the market, but the expected balance between October and November; the cost side is mainly volatile and lacks upward drive. Therefore, we believe that the short-term TA market is mainly volatile, with an operating range of 3350-3550 yuan / ton.