Recently, shopkeeper Tong chatted with the person in charge of a well-known PTA manufacturer who did not want to be named about the market situation and price of PTA.
The production capacity of the PTA industry is still in a state of excess, and the industry is still undergoing adjustment. Since the beginning of this year, PTA social inventory accumulation has been rapid, with both accumulation speed and inventory quantity at a high level.
At the same time, the overall atmosphere of commodities has weakened recently. The sharp decline in PTA futures prices in March was affected by the overall decline in commodity prices. It was not just the performance of a single variety, and was expected by enterprises.
The current overall processing fee level of the PTA industry is about 580 yuan/ton (tax included), which is near the break-even point.
Some large-scale PTA spot leading manufacturers have scale advantages and upstream supporting advantages. In addition, the factory is close to the dock or close to the polyester demand market, which has geographical advantages, so the overall production cost is lower than the industry average.
For example, if a company has an annual PTA production capacity of 5 million tons, if the production cost per ton of products can be reduced by 10 yuan, then the annual profit will be 50 million yuan.
From October to December 2016, the PTA industry was in a profitable state, but the rise in PTA prices during that period was only temporary.
The fundamentals of the PTA industry are still weak at present, and the industry as a whole is on the edge of profit and loss. It is unimaginable that it can still make money.
Under such fundamentals, our company’s idea is to conduct hedging in the futures market to lock in forward operating risks and ensure stable operations. For example, if the company’s PTA inventory value is 5,000 yuan/ton, and the price of PTA futures is 5,200 yuan/ton, then we will go to the futures market to preserve the value.
Looking at the PTA futures market, there are relatively few bulls who actually want to take delivery in the near future. When delivery is approaching, the bulls are relatively passive. This creates a need for contract month change in the futures market, and the main PTA contract needs to be changed from May to September. This is also a factor leading to the decline in PTA prices.
Now, many bosses of weaving companies are staring at the PTA futures market every day and always pay attention to the PTA futures price. They had seen the price of PTA futures fall before and believed that the price would continue to fall, so they continued to purchase chemical fiber raw materials cautiously, which further increased the inventory pressure on polyester companies.
In this way, a situation will be formed. The lower the price of PTA, the less weaving companies will buy goods, the worse the demand from polyester companies, and the fundamentals of the PTA industry will continue to deteriorate, causing PTA prices to continue to fall. This creates a negative cycle.
Overall, the most critical thing to analyze the price trend of PTA is to look at the fundamentals of the industry.
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