Due to the impact of the new coronavirus epidemic, on February 3, the futures market opened for the first time, and both PTA and ethylene glycol fell by the limit. Although the decline was expected Among them, but the limit seems to be a bit higher than expected.
In the two weeks since the market opened after the holidays, various commodities have rebounded along with crude oil prices, and PTA and ethylene glycol are no exception. Futures prices have risen, and prices have also risen.
PTA has always been the “big brother” in the polyester raw material market, once devouring the profits of the entire industry chain. Compared with PTA, ethylene glycol is a It is a relatively small chemical product, so it is common for PTA to be priced higher than ethylene glycol. However, as can be seen from the table below, the current momentum of ethylene glycol is “stronger” than PTA, and the price has already surpassed that of PTA.
Low inventory is still E2 The strongest support for alcohol
In fact, since the beginning of December last year, ethylene glycol has been silently making a “big comeback”, with the internal price overwhelming PTA. From December to now, the price of ethylene glycol has been higher than that of PTA. Occasionally, there is a convergence point, and the price of ethylene glycol has dropped, but then rebounded immediately, without giving PTA a chance to fight back.
The main reason why ethylene glycol is so arrogant is still its low inventory!
Since the second half of 2019, ethylene glycol has had good fundamentals and has been in the destocking channel. The inventory effect has been significant. Low inventory supports the ethylene glycol market. Keep pulling up. Especially in the two months at the end of the year, the ethylene glycol East China port has been constantly closed due to weather conditions, the arrival of ships has been slow, the actual arrival volume has been reduced, and the available spot goods on the market have become tighter. This has made the inventory of ethylene glycol at the main port in East China at the end of the year Refresh the new year’s low. However, PTA continues to accumulate inventory cycles due to the continuous strengthening of supply.
During the Spring Festival, the inventory of polyester raw materials continues to increase. As of February 14, PTA social inventory increased to around 2.265 million tons, and ethylene glycol dominated East China. Port inventories increased to around 730,000 tons. However, in the recent stage, with the restart of polyester plants that had been shut down for a long time in the early stage, some large factories that had reduced production after the holiday have also taken measures to increase production. The comprehensive polyester load has rebounded to 62.1%, and the demand for polyester raw materials has strengthened. On the 21st, The inventory of ethylene glycol at the main port in East China dropped slightly to around 655,000 tons, but the PTA social inventory continued to increase to around 2.39 million tons.
The continuous accumulation of inventory has suppressed the rising momentum of PTA prices, and ethylene glycol can be described as “a spring breeze.”
The downstream weaving market has resumed work one after another, and the “strongest assist” is already on the way. So what are the chances of PTA’s counterattack winning?
In the short term, the editor still believes that the chance of PTA’s strong counterattack in the short term is not great, but there is still hope for capital preservation.
During the Spring Festival when the epidemic broke out, PTA inventory has exceeded 2 million tons, reaching a high inventory level in recent years. During this period, The lowest price of PTA reached 4,230 yuan/ton. Then the inventory continued to increase, but the price began to rebound slightly and fluctuated within a range. It can be seen that the price of PTA has reached the bottom and there is no more room for decline.
In addition to inventory, the supply of PTA itself is also one of the important factors that determine its price. In the past two years, PTA production capacity has been heavily invested, resulting in an imbalance between supply and demand. At the end of 2019, all the newly added 3.7 million tons/year production capacity have been successfully put into operation, and there are still plans to add more than 10 million tons/year new production capacity in 2020. Although most of it may be launched in the later stage, it is still a big pressure.
Of course, terminal demand is the most important factor. At present, the terminal weaving market has resumed work one after another, and it is expected that production capacity can be effectively increased by March to mid-March. But on the one hand, the epidemic will have an impact on the orders received by weaving manufacturers, and the demand is insufficient. The demand for raw polyester filament is naturally more rigid; on the other hand, because polyester manufacturers have been accumulating inventory during the Spring Festival, Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 30-40 days; in terms of specific products, POY inventory is around 24-30 days, FDY inventory is around 26-32 days, and DTY inventory is around 26-32 days. to about 31-40 days. The inventory of polyester manufacturers has soared, and most polyester filament manufacturers have delayed restarting equipment and production reduction plans, and the demand for upstream PTA is even more cautious.
It seems that in the short term, ethylene glycol will continue to be proud. . If the recovery of terminal weaving production capacity accelerates and the epidemic ends early, PTA’s chances of winning back are still relatively high. However, from the facts, although the country has started to resume work and production, the epidemic has not ended. Weaving manufacturersThe staff attendance rate is still low, which to a certain extent has restricted the upward momentum of the PTA market.
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