Recently, PTA cost-side support has been strengthened, but supply and demand are still under pressure. It is expected that the short-term price will consolidate in the range of 5800-5950 yuan/ton.
Strong cost-side support
In terms of crude oil, OPEC maintains production cuts to provide bottom support, and there is some room for a short-term rebound in oil prices. The recent focus will be on the results of the OPEC Ministerial Meeting held on November 26. In the medium to long term, the global high interest rate environment will suppress commodity prices, domestic processing demand will decline marginally, and the demand for oil-to-gas replacement will be sluggish. The subsequent oil price will be weak.
In terms of PX, the recent continued rebound in crude oil prices has driven PX prices to strengthen. However, from the perspective of PX fundamentals, with the end of the peak gasoline consumption season, the increase in the operating rate of the disproportionation unit has significantly increased the supply of PX. Recently, Shenghong’s 4 million-ton unit and Zhenhai Refinery’s 800,000-ton unit have resumed production and increased their load. As of November 10, the domestic PX weekly operating rate was 80.2%, an increase of 1.5 percentage points from the previous month; the Asian PX operating rate was 74.7%, an increase of 1.7 percentage points from the previous month. PXN further compressed and fell slightly below $370/ton. From the perspective of supply and demand, the maintenance of Dongying Weilian Line is expected to be completed next week. The supply of PX has increased significantly, and there is an expectation of accumulation of inventory.
PX spot trade is mainly long-term. Near the end of the year when PX signs long-term contracts, there is news that Japan and South Korea may reduce the proportion of long-term contracts. We need to continue to pay attention to the PX long-term contract negotiations in the future. Recently, the market has begun to deal with delivery conditions in January next year, and short-term prices are still supported.
Supply expected to increase
The recent PTA supply and demand structure is acceptable. This week, PTA social inventory is approximately 2.9117 million tons, a month-on-month decrease of 9100 tons. Yizheng’s 640,000-ton PTA unit will undergo maintenance this week, and Yadong and Yisheng Ningbo PTA units will start maintenance in early January next year. Supported by the fulfillment of early planned maintenance, delayed restart of some devices and macroeconomic sentiment, PTA processing fees recovered to a high of 411.3 yuan/ton. With the unplanned load reduction in the second phase of Yisheng New Materials, the current PTA operating rate has dropped to 74%. In terms of spot goods, equipment maintenance and new production capacity are increasing at the same time, and the supply is expected to be loose. However, the short-term polyester load has not weakened significantly and remains around 90%. Spot traders are willing to raise prices, and some polyester factories have bargained for low prices. .
In terms of new production capacity, Yisheng Hainan’s new 2.5 million-ton PTA unit will be put into operation as planned in November, Hanbang’s 2.2 million-ton PTA unit is expected to be put into operation this weekend, Sichuan Energy Investment’s 1 million-ton and Ineos’ 1.1-million-ton PTA units are scheduled to restart at the end of November. , the load of PTA devices will gradually increase in the future, and the load is expected to increase to more than 80% by the end of this month, and supply and demand are still expected to be ample.
Taken together, PTA processing fees have returned to high levels, and PTA prices are under pressure amid the restart of early maintenance equipment, the increase in new production capacity and the expected seasonal weakening of demand.
Downstream negative feedback turns on
As of November 10, the operating rate of polyester equipment has not changed much, and local loads have been slightly adjusted. At present, the seasonal peak season has passed, and the inventory of polyester products has gradually accumulated, and the benefits have been compressed. As of November 10, the equity inventories of POY, FDY and DTY in Jiangsu and Zhejiang polyester factories were 18.1 (2) days, 18.1 (1) days and 27.7 (0.5) days respectively. This week, the equity inventory of direct-spun polyester short 1.4D for spinning is 13.6 (0.6) days, and the physical inventory is 20.6 (0.2) days.
Taken together, the overall inventory pressure of polyester products is obvious. POY and FDY factory inventories have both risen to more than 18 days, while the equity inventory of direct-spinning polyester short factory is 13.6 days. The overall production and sales of polyester yarn in Jiangsu and Zhejiang have weakened, and the operating rates of terminal texturing, weaving, printing and dyeing have partially declined. As of November 10, the operating rate of texturing in Jiangsu and Zhejiang was 89%, the operating rate of looms was 79% (down 1 percentage point), and the operating rate of printing and dyeing was 76% (down 6 percentage points). Terminal weaving shipments and orders have weakened significantly. Printing and dyeing factories have taken the lead in reducing operations, and negative feedback has gradually emerged. With the seasonal weakening of the demand side, downstream inventory accumulation is likely to accelerate.
To sum up, after the sharp decline in crude oil prices, there is still some room for rebound in the short term, and PTA has strong cost-side support. In terms of supply and demand, the restart of maintenance equipment and the addition of new production capacity due to high processing costs are expected, and the supply of PTA is sufficient. Although the polyester load currently remains at 89%-90%, there are expectations for seasonal declines in the future. The reduction in terminal orders and the accumulation of finished products may form negative feedback. At present, the inflection point of downstream construction has appeared. The downstream benefits are still good, but the inventory accumulation is accelerating. It is expected that the negative feedback effect will gradually appear. PTA faces the contradiction between strong cost support and pressure on supply and demand. It is expected that the short-term price will oscillate in the range of 5750-5950 yuan/ton.
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