Recently, after two unsuccessful attempts to hit 5,000 points, PTA not only successfully broke through the high of 5,000 points, but also rose by more than 200 points during the session, proudly proud of the domestic futures market!
Currently, PTA is still rising. As of the closing at 15:00 on June 28, the main 2109 contract of PTA futures finally closed at 5196 points, an increase of 44 points or 0.85% from the previous trading day.
Behind such a strong trend of PTA, what is the logic driving it?
01
Crude oil continues to rise, and costs push PTA
Obviously, the trigger for the strong outbreak of PTA The main reason is that crude oil has risen. Since June, international oil prices have continued to rise. As of the early morning closing of June 26, Beijing time, the closing price of WTI crude oil futures for August delivery was US$74.05 per barrel, and the closing price of London Brent crude oil futures for September delivery was US$75.38 per barrel, both the highest since October 2018. the highest closing price. This is also the fifth consecutive week that international crude oil prices have risen.
In addition, there are many accidents in PX devices. It is said that the load of PX devices of a major manufacturer has been reduced to 50% for some reason, and the delivery time of new devices may be postponed to the end of July. Overall, due to the weak supply of crude oil and PX, the performance of PTA on the cost side is relatively strong, which is the main reason for the increase in PTA prices.
02
Downstream goods show preference, and demand for PTA increases
On the demand side, it is understood that , texturing companies are currently in full swing, and the entire industry is at full capacity. Most of the warp knitting enterprises in Changxing and Jiaxing are operating at full capacity. Due to the impact of production restrictions in Shengze area, the operating rate of water spray and air jet is 63.5%, but most manufacturers have increased the operating rate to the maximum production requirements. Generally speaking, downstream demand is good and is gradually picking up.
Although the production and sales of polyester filament are average, production and sales can only exceed 100 on weekly promotion days, and most of the time they are concentrated at 50%-70%. However, with the strong rise in crude oil and PTA, the mentality of downstream weaving manufacturers in purchasing polyester filament has changed, and they will return to the “buy-up” mentality. Therefore, the production and sales of polyester filament also show an upward trend.
Can PTA’s rising trend continue? It is also something that the industry is paying attention to. The editor believes that the room for PTA to grow in the future must be viewed from the cost side, supply side, and demand side.
01
Crude oil has huge upside potential and strong cost support
In terms of crude oil, oil prices may continue to rise in the future. Francisco Blanch, commodities strategist at Bank of America, said in a research note that he believes there is reason for oil prices to reach $100 a barrel next year. The rapid recovery in global oil demand, the rebound in road and air travel in Europe and North America, and the easing of investor concerns about the early return of Iranian crude oil are all supporting the rise in oil prices. In addition, U.S. air strikes in parts of Iraq and Syria have also provided a strong external boost to crude oil prices.
02
There are many maintenance plans for PTA equipment, increasing supply pressure
On the supply side, many sets of equipment have begun maintenance. The 1.2 million ton Sanfangxiang 1# 1.2 million ton PTA unit will be shut down for technical renovation from June 25; the 650,000 ton PTA unit of Sheng Petrochemical will be shut down for 10 days from June 25 for maintenance. Around; Yizheng chemical fiber 650,000 tons unit will be inspected for about 7 days starting from June 25. Currently, there are maintenance plans for many sets of equipment, but the specific time is not yet clear. According to relevant research report data, PTA spot processing fees are constantly being squeezed. From February to March, spot processing fees have been fluctuating between 200 and 400, and cash flow may be at a loss. Therefore, the willingness of factories to perform maintenance has increased significantly.
If these devices undergo centralized maintenance, it will have a significant impact on the market. The supply pressure of PTA will increase, and the current operating rate of the downstream weaving end is good, the order situation has improved, and the demand will also rise further. Therefore, PTA prices are expected to remain on an upward trend.
03
Downstream will welcome the peak season, and the demand for PTA will rise
In terms of demand, tracing back to the polyester end, polyester filament will also be affected. Polyester filament launched its tenth promotion last Tuesday and has been rising for three consecutive days. Since April, polyester prices have tended to experience slight corrections on the second day after sales, and then run smoothly from the third day onwards. The situation of rising for three consecutive days has never happened again. Ten sales of polyester filament in three months may end with the surge in PTA. The mentality of “buy up but not down” among weaving enterprises has returned again, and polyester yarn production and sales are expected to pick up.
Going back to the weaving end, the weaving market has improved recently, especially foreign trade orders are also increasing, and the number of gray fabrics has increased significantly. It is understood that the orders received in the market now are generally based on autumn and winter fabrics, basically to stock up in advance for this year’s autumn and winter. From the perspective of stocking time, the market started slightly earlier this year than in previous years.It also indicates that the market in the second half of this year will be better than in previous years. The downstream will soon usher in the traditional peak season of “Golden Nine and Silver Ten”, and the volume of gray fabric shipments will inevitably increase again. The demand for polyester filament will increase with the increase in downstream orders, thus driving the rise of PTA.
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