Market: Loose Cost Support, PTA Futures Limit

On March 2, the domestic futures market closed, most commodity futures fell, led by energy and chemical industry, including PTA limit. As of the end of the day, PTA was down 5.02% to 4574 yuan. According to price monitoring, the average market price on March 2 was 4536 yuan / ton, down 4.36% from the previous trading day.

Crude oil production expected cost support loose

Crude oil market is facing the risk of callback, PTA cost side appears certain signs of loosening. At the end of February, Saudi Arabia reduced production by an additional 1 million barrels / day from February to March, the US shale oil production decreased due to extreme cold wave weather in the United States, and the US $1.9 trillion epidemic relief plan continued to advance, and international oil prices remained strong. However, in March, with the OPEC + meeting approaching, the crude oil market showed a certain cautious wait-and-see mood. OPEC + is expected to ease restrictions on crude oil production at this week's meeting, with news that OPEC will increase production by 1.6 million barrels / day from April. Moreover, Saudi Arabia has hinted that it will not rule out the possibility of canceling the additional production reduction in March, while Russia and other countries may propose a small increase in production. In the case of increasing production or exceeding expectations, the market is worried about the deterioration of supply and demand in the future market of crude oil, so the price has a narrow range of correction for consecutive days.

Periodic improvement of self supply surplus contradiction

However, from the perspective of PTA fundamentals, it is expected that there will be phased improvement in the short term in March. Unit maintenance increases under low profit. From March to April, several PTA units are facing maintenance. It is estimated that the maintenance capacity will reach up to 196.5 million tons (including the shut-down units). In a short period of time, there may be periodic destocking. The market supply and demand will be slightly eased, including 3 sets of 6.9 million tons / year units of Hengli petrochemical, 5 million tons / year of xinfengming, 1.5 million tons / year of Honggang petrochemical and 1.4 million tons / year of Huabin petrochemical The unit of Zhuhai bp1.25 million tons / year is scheduled to be overhauled. In terms of new units, the 2.5 million tons / year new unit of Honggang Petrochemical is expected to discharge in early March, so PTA maintenance will offset the pressure of new unit production in stages.

Statistics of recent PTA plant maintenance and new plant commissioning unit: 10000 tons

The demand for resumption of work and production in the lower reaches remained strong

In addition, from the demand side, after the end of the Spring Festival holiday, downstream polyester and terminal weaving enterprises gradually returned to production, and market trading activities began to warm up. Due to the local government's advocacy of local new year's day this year, the polyester plant operation during the holiday period is slightly higher than that in previous years. In addition, the situation of non local employees coming to work after the festival is better than that in previous years, the polyester plant start-up shows a rapid recovery trend after the festival, and PTA demand continues to increase. At the same time, affected by the recent rise in raw material prices, under the mood of "buy up, don't buy down", polyester production and sales are in large volume. In March, polyester operating rate will quickly rise to around 90%, and PTA demand will maintain strong. With the coming of the "golden three silver four" traditional demand peak season, the operating rate of Jiangsu and Zhejiang looms has also been raised to more than 70%.

Analysts believe that at present, PTA is still dominated by the cost side. In the short term, although the price center of PTA will move down due to the decline of cost side, the spot liquidity is expected to be further tightened under the decline of supply and demand, and the short-term improvement of supply and demand also has a certain positive support for prices. However, in the medium and long term, the maintenance period of PTA plant is mostly half a month. With the restart of future plants and the smooth operation of new units, the supply is expected to reach a new high again. In addition, the overall social inventory has been at a high level of nearly 5 million tons. It is estimated that the overall supply and demand of PTA will still be in the situation of high production, high supply and high inventory in 2021, and the contradiction of supply exceeding demand has not been eased substantially. If the cost side collapses and the supply and demand side is in a negative situation, it is expected that PTA price will still fall back.