PTA has fallen back from its recent highs, with the 2009 contract falling from 5,658 yuan/ton in early August to the lowest of 4,862 yuan/ton on August 23. The reasons for the decline include: the decline in crude oil and the increased negative feedback on PTA terminal demand. Regarding the evolution of the market outlook, the author’s analysis is as follows:
1. In the short term, crude oil is still in the destocking cycle caused by OPEC’s cautious increase in production.
Supply increased moderately. OPEC’s monthly report shows that OPEC’s oil production reached 26.657 million barrels per day in July. OPEC’s production reduction implementation rate in July was 110%, and Russia’s production reduction implementation rate was 95%. OPEC’s monthly report also raised its non-OPEC oil supply growth forecast for 2021 by 270,000 barrels per day to 1.1 million barrels per day, and increased its non-OPEC oil supply growth forecast for 2022 by 840,000 barrels per day to 2.9 million barrels per day. The IEA monthly report pointed out that global oil supply increased by 1.7 million barrels per day in July to 96.7 million barrels per day; oil supply outside OPEC is expected to increase by 600,000 barrels per day this year and 1.7 million barrels per day in 2022, of which 60% of the increase came from the United States. Russia’s oil production dropped to 10.41 million barrels per day from August 1 to 23, compared with 10.46 million barrels per day in July. The decline in production was mainly due to a fire at the northern processing plant of Gazprom, after Russia planned to increase production by 100,000 barrels per day from August 1.
U.S. crude oil production increased by 100,000 barrels this week to 11.4 million barrels per day. In its monthly report, EIA estimated that U.S. crude oil production in 2021 would be 11.12 million barrels per day, raising its crude oil production forecast higher than the previous forecast. 50,000 barrels/day.
Inventory decline: The OPEC report pointed out that preliminary data showed that the total OECD commercial oil inventory in June was 2.922 billion barrels, a decrease of 23 million barrels from the previous month, 289.4 million barrels lower than the same period last year, and 289.4 million barrels lower than the previous five months. The annual average is 90.4 million barrels below the 2015-2019 average; 25.2 million barrels below the 2015-2019 average; IEA data shows OECD commercial oil inventories in June were 2.9 billion barrels, a decrease of 50.3 million barrels from the 2015-2019 pandemic The previous average was 66 million barrels lower. Data from the American Petroleum Institute this week showed that U.S. oil product inventories fell across the board last week, with crude oil inventories falling by 1.6 million barrels, gasoline inventories falling by 1 million barrels, and distillate inventories falling by 250,000 barrels.
Demand concerns have eased: This month’s monthly report agency lowered demand. The International Energy Agency predicts that global average daily demand will grow by 5.3 million barrels in 2021, a decrease of 100,000 barrels from last month’s report; however, The forecast for global average daily oil demand growth in 2022 has been raised to 3.2 million barrels from the original 3 million barrels. The International Energy Agency said in a report that the agreement reached by OPEC and its production-cutting allies on July 18 is easing supply shortage concerns and, if maintained, may lead to oversupply in the first quarter of 2022. The domestic epidemic has been brought under control this week. India’s crude oil processing volume in July rose to the highest in three months, with an absolute value of 4.58 million barrels per day, an increase of 1.9% month-on-month and a year-on-year increase of 9.6%. India’s refinery operating rate in July is 91.34%. Economic activity in India increased after the epidemic. Demand concerns have eased.
Demand concerns have eased this week due to the rebound of the epidemic last week, the decline in economic indicators in July, my country’s macroeconomic policy trends, the strengthening of the U.S. dollar and the Federal Reserve’s hint that it may taper within the year, leading to a sharp fall in oil prices. Overall, the short-term supply side is experiencing moderate growth. In the short-term, it is in a destocking cycle brought about by OPEC’s cautious increase in production, with high fluctuations. Long term existence is expected from tight to wide.
2. There is limited room for PX processing fees to fall
Yesterday, the closing price of the Asian PX market was 903.67 US dollars/ton CFR China and 884.67 US dollars/ton FOB South Korea, rising US$15/ton. Naphtha price is US$639.75/ton CFR Japan, up US$24.625/ton. In terms of operating rate, domestic operating rate remains high. This week, China’s PX average operating rate was 76.37%, with output of 433,100 tons. Asia’s average operating rate was 76.37%. The output is 948,800 tons. PXN closed slightly higher this week, with PXN closing at $279.375/ton, a month-on-month increase of $5.755/ton. In terms of inventory, as of the end of June, PX social inventory was 3.75 million tons, an increase of 30,000 tons from the previous month. The import volume of PX in June was 1.137 million tons. The import volume was relatively high, causing PX to accumulate in a narrow range
In the short term, the continued shutdown of new downstream devices will be a negative guide for PX, and it is expected that PXN will be under pressure to decline. trend. Consider the third batch of crude oil non-state trade import quota of 4.42 million tons, of which 3 million tons are from Zhejiang Petrochemical, or a total of 20 million tons, which is not enough to start the second phase. Market rumors say that this is a temporary quota, and attention will be paid to whether there will be a fourth batch of supplements in the future. Against the background of relatively high economics of oil adjustment, it is expected that the newly added production capacity will only accumulate a small amount of inventory after it is put into production, and the rate is controllable. There is limited room for PX processing fees to fall.
3. PTA start-up load is increasing
The overall start-up load of domestic PTA devices has increased to 76.90%. According to the PTA routine maintenance plan in August, that month Domestic PTA supply and demand continued to destock, but the intensity of destocking began to drop significantly in mid-to-late August. The PTA basis spread is weak at around -40 yuan/ton for the 01 contract, and the PTA processing fee has fallen back to around 540 yuan/ton. Yisheng New Materials has a capacity of 3.6 million tons, of which the second line with a capacity of 1.2 million tons has been put into production and is expected to resume normal production on 8.25. The other line with a capacity of 1.2 million tons has plans to restart in the near future. Shenghong 1.50 2.5 million ton PTA unit was temporarily shut down due to power problems on 8.22. The 2.5 million ton PTA unit has restarted to increase load, and the 1.5 million ton PTA unit is scheduled to restart at the end of the month.
4. Negative demand feedback continues
The comprehensive operating load of domestic polyester dropped slightly to 85.28%. Polyester product prices have fallen to varying degrees this week. As of Friday, the price of short fiber has dropped by 100 yuan/ton from last week, POY in filament has dropped by 230 yuan/ton, FDY has dropped by 200 yuan/ton, and DTY has dropped by 150 yuan/ton. Yuan / ton. In addition, due to the mixed prices of raw materials PTA and MEG, the profit of polyester products this week showed different levels month-on-month.The profit of short fiber was basically the same as last week, the profit of POY in filament was compressed by nearly 100 yuan/ton, the loss of FDY was expanded by nearly 100 yuan/ton, and the profit of DTY was basically the same. From the perspective of operating rate, the operating load of terminal weaving enterprises continues to decline month-on-month. This week, the weekly average operating loads of Jiangsu and Zhejiang looms and texturing machines were 75% and 94% respectively. The former dropped 4.4% month-on-month, while the latter remained unchanged% . In addition, the overall terminal production and sales rate this week is relatively sluggish, and polyester product inventories have increased to varying degrees. The overall polyester market inventory is concentrated at 18-28 days. In terms of specific products, POY inventory is at 15-24 days, and FDY inventory is at 18 days. -20 days is around, while DTY inventory is up to 21-29 days.
Starting this week, Tongkun, Xinfengming, Hengyi, and Tiansheng each plan to reduce production by 20%, affecting more than 4 million tons of polymer production capacity, and the polyester load is expected to continue to fall.
V. Conclusion
The increase in supply and demand for PTA is weak, and the supply and demand drive is weak. Considering that the PTA spot processing fee is 500 yuan/ton and the futures processing fee is 545 yuan/ton, the PTA export window is still open, the PTA valuation is already at a reasonable level, and there is limited room for further reductions in PTA processing fees. The short-term fluctuation of crude oil is bullish. In terms of operation, TA left the market with short orders in the early stage. In the short term, it can rely on the direction of cost changes. It is better to be short and long at low prices. </p
