PTA began to stop falling and rebound in late March. However, this upward trend has been quite unsatisfactory, often advancing three times and retreating two steps. Last Friday, futures prices rose again after a slight fall; short fiber performance was weaker than PTA, always fluctuating in the 6830-7300 range; ethylene glycol is still looking for support in the decline.
After the main force switches to new contracts, what are the supply and demand prospects of the polyester chain? Which product has more upside potential in the medium to long term? What is the main logic of the current three-way market?
Reporter: After mid-April, the three varieties of polyester chains all experienced a surge and fell. Last week, they stabilized and rose again. Among them, PTA rebounded sharply. The largest increase, while ethylene glycol has the smallest increase. What is the difference between the two?
Pang Chunyan, senior analyst of SDIC Essence Futures: PTA prices are weak due to high social inventories, which is reflected in the fact that the processing fee has remained at a low level of less than 400 yuan/ton for a long time. This processing fee level has been seen in previous years, and the newly put into production equipment can Maintain profitability, mainstream devices and old devices suffer losses to varying degrees. However, due to the soaring price of acetic acid this year, the cost of auxiliary materials has increased, and the processing cost of PTA has therefore increased by about 200 yuan/ton compared with the same period last year. This means that the lowest-cost device put into production in the past two years in the PTA industry has also fallen into a loss-making state. Therefore, PTA companies are in 3- In April, they took the initiative to conduct maintenance, and the factory contracted goods were reduced in supply. Recently, the price of PTA acetic acid has continued to soar, while the processing gap of PTA has not improved. Some companies have announced that they will continue to reduce supply in the May contract, and PTA continues to be destocked. However, the current PTA destocking has not yet led to a qualitative change from a quantitative change, so the industry’s low processing and poor processing situation has not yet changed. The recent price increase is mainly caused by cost push.
The supply and demand patterns of ethylene glycol and PTA are quite different. First of all, ethylene glycol is a product that is in short supply domestically and still needs to be replenished by imports. Starting from the fourth quarter of last year, European demand rebounded but supply was in short supply. International ethylene glycol spot goods flowed to the European market where prices are relatively high, and domestic imports fell sharply. In the first quarter of this year, due to the extremely cold weather in the United States, the supply of ethylene glycol and upstream ethylene raw materials was affected, and the impact lasted until mid-to-late March. As a result, China’s ethylene glycol imports did not recover until late April. Therefore, domestic ethylene glycol port inventories continue to decline, and prices were once strong. However, the positive reality of the ethylene glycol industry has been digested by the market. What the industry faces in the future is the successive commissioning of two sets of large-scale ethylene and multiple sets of new coal chemical plants, plus the recovery of imports. Therefore, the market for ethylene glycol is currently weak, mainly trading on expectations of supply recovery. As ethylene glycol industry profits improved during the first quarter’s strength, there is room for prices to fall amid expectations of supply recovery.
Zhai Qidi, founder’s mid-term futures energy researcher: The difference between the two mainly lies in the different strengths of supply and demand. As far as PTA is concerned, since March-April, the processing fee of the PTA industry has been squeezed to 300-400 yuan/ton. If the strong increase in the price of auxiliary material acetic acid is taken into account, the industry has fallen into a state of serious losses. Therefore, since March-April, the industry equipment Due to intensive maintenance, major major manufacturers have reduced contract supply. Since April, PTA social inventory has dropped by more than 450,000 tons, indicating a periodic improvement in supply and demand. As far as ethylene glycol is concerned, although the supply and demand of ethylene glycol were tight in April, there was a lot of new supply at home and abroad from May to June, and the supply and demand expectations were pessimistic. Recently, the ethylene link of two large-scale integrated refining and chemical plants of Satellite Petrochemical and Zhejiang Petrochemical has been basically operating normally. Among them, Satellite Petrochemical’s ethylene glycol may be able to stably supply the market in May, and Zhejiang Petrochemical’s ethylene glycol unit may be put into trial operation in May. Domestic new production capacity many. At the same time, supplies from Saudi Arabia will arrive in Hong Kong one after another at the end of April, and supplies from Iran and the United States will also arrive in Hong Kong in May. Under the pressure of the rebound in import volume and the commissioning of new domestic equipment, the main port in East China will open up storage, and the supply and demand side of ethylene glycol will be short-term. It’s hard to be optimistic.
Liu Mengmeng, industrial products analyst at Huishang Futures Research Institute: Because polyester is a common downstream of the two, the demand side has a similar impact on the two. The recent operating rates of downstream polyester and Jiangsu and Zhejiang looms At a high level, as of April 23, the operating rate of polyester factories was approximately 91.69%, and the operating rate of Jiangsu and Zhejiang looms was approximately 82.4%. The demand side supports both. The difference between the two mainly lies in supply. There are many PTA equipment overhauls. Since mid-April, the PTA operating rate has been at a periodic low, and the supply has shrunk. In addition, the PTA processing fee is low, which also provides certain support to the market; ethylene glycol port inventory is at a relatively low level. The low level provides some support for the price, but the operating rate is relatively high. In addition, domestic ethylene glycol has recently been affected by the upcoming commissioning of new production capacity. The spot market price has continued to decline, and supply is still under pressure.
Reporter: After the main players switch to new monthly contracts, what are the supply and demand prospects of the three? Which product has more upside potential in the medium to long term?
Pang Chunyan, senior analyst of SDIC Essence Futures: After the main force changes to the month, the PTA market logic has not changed, the expectation of oversupply remains unchanged, and in September, there will be concentrated cancellation of warehouse receipts, and the pressure on the spot market will be more obvious. However, what needs to be paid attention to in the future market is that production companies continue to reduce production due to losses, some devices may face long-term shutdowns, market production capacity iterates, and exports increase, whether the destocking of the PTA industry can lead to qualitative changes from quantitative changes, thus triggering the initiative of poor processing. repair. Of course, judging from the huge social inventory and the expectation of concentrated production, it is unlikely that the PTA supply and demand pattern will be reversed. Even if processing fees are restored in the short term, the situation will still be weak in the medium and long term, and the trend mainly depends on raw materials.
Under the expected suppression of ethylene glycol’s market outlook, it may continue to hit the bottom, and the industry willIt is inevitable to fall into loss-making devices again, and high-cost devices may once again fall into the dilemma of parking and stopping losses. Once the inventory turning point appears, ethylene glycol prices will enter a longer-term downturn, and the potential for growth is currently difficult to see.
Short fiber is a variety with a good supply and demand pattern and price elasticity. However, due to the large speculative stocking volume of downstream companies around the Spring Festival, downstream companies have mainly digested inventory in March, but terminal orders have been relatively small. The difference has resulted in a lack of new speculative demand from downstream enterprises. Therefore, the production and sales of short fiber have remained sluggish since March. Although there was a brief increase in volume during the period, it lacked sustainability, so the price of short fiber continued to weaken. However, short fiber profits are currently at a historical low. In the medium and long term, once the downstream raw materials are exhausted, or orders improve, and speculative stocking demand increases, there will be greater room for a rebound in short fiber profits.
Founder mid-term futures energy researcher Zhai Qidi: After the month change, the main force of PTA ethylene glycol is 2109 contract, and the main force of short fiber is 2107 contract. At present, the pressure on the supply and demand side of the PTA far-month 09 contract is still high. The market is worried about the restart of early maintenance equipment, the commissioning of a new 3.3 million tons/year equipment of Yisheng New Materials, and the inflow of futures stocks into the spot market. In the future, the focus will be on the cost side. Opportunity to increase. The supply and demand of the ethylene glycol 09 contract is still expected to be in excess, mainly due to the commissioning of large-scale domestic refining and chemical plants and the rebound in import volume. In the future, large-scale shutdowns of domestic plants and a contraction in import volume will be required to restore the supply and demand balance. The short fiber 07 contract is an off-season contract, and the 09 contract may have seasonal rising opportunities in the future. At present, none of the three has seen unilateral sustained upward momentum. In the future, PTA will focus on cost-driven, ethylene glycol will focus on supply-driven, and short fiber will focus on demand-driven.
Liu Mengmeng, industrial products analyst at Huishang Futures Research Institute: In terms of ethylene glycol, remote supply pressure is more obvious, but the current market gross profit is shrinking, and the main port inventory remains low. In addition, there are many in May Several sets of equipment have maintenance plans, and the contradiction between supply and demand has been eased to a certain extent. Taken together, it is unlikely that domestic port inventories will accumulate significantly. In addition, the negative effects of the recent rapid decline in the market center of gravity have been released, and the probability of further suppression is unlikely. In terms of PTA, the start-up of downstream polyester production has reached a historically high level. In addition, there are few new terminal foreign trade orders, which makes it more difficult for polyester demand to continue to increase. And with the opening of the new PTA equipment of Yisheng New Materials Phase I, PTA will have The accumulation of warehouses is expected, and the warehouse receipts still need time to be digested, which will restrict PTA’s own upward strength. Overall, the PTA futures market’s rising drive will weaken in the later period. In terms of short fiber, although the spot processing fee space for polyester staple fiber has been at a low level, terminal orders have not yet improved. The traditional textile off-season will be ushered in next. At present, the return of some overseas orders may have an impact on the market. However, its quantitative impact is still difficult to track, and its impact on polyester staple fiber may not be significant. Therefore, for polyester staple fiber, the short-term market positive support signals are insufficient, and the market and spot gains may not be sustainable. Overall, the supply and demand of the three are expected to weaken in the later period. In comparison, ethylene glycol may still have some support.
Reporter: What is the main logic of the current trio? Is it possible for PTA and staple fiber to break through the previous high?
Reporter: Pang Chunyan, senior analyst of SDIC Essence Futures: PTA mainly suffers from abundant inventory, production losses, price ups and downs, and passively follows the fluctuations in raw material prices. PX’s performance is relatively strong due to the mismatch of supply and demand rhythms. However, in the future, with the expected production reduction of PTA equipment and the commissioning of Zhejiang Petrochemical’s PX equipment, PX prices may loosen. Ethylene glycol is mainly a transition from tight reality to loose expectations. During the process of continuous squeeze of profits, in the later period, the price will be sideways at the bottom caused by the active contraction of supply and cost support caused by losses. Short fiber is currently mainly due to weak demand and depressed prices. In the future, there is an expectation that downstream stocking demand will increase and short fiber will take the initiative to strengthen. Overall, PTA and ethylene glycol are in a period of capacity expansion, and supply pressure will increase in the future. The short fiber supply and demand pattern is acceptable, but weak orders affect market mentality. Therefore, without the cooperation of oil prices, it is unlikely that the price of polyester products will break through the previous high.
Founder mid-term futures energy researcher Zhai Qidi: At present, PTA follows the logic of cost pricing and phased supply and demand improvement, the logic of new ethylene glycol equipment being put into production and import volume rebounding, short fiber terminal orders are poor, and speculation The logic of insufficient sexual needs. May to July is the traditional off-season for terminals. The current demand is weak. At the same time, the oil price on the cost side is high and volatile, and there is a lack of upward drive. It is unlikely that PTA and short fiber will break through the previous high.
Liu Mengmeng, industrial products analyst at Huishang Futures Research Institute: Recently, ethylene glycol has once again become a short-selling allocation of funds under strong expectations of increased supply. There has been a significant adjustment trend in several consecutive trading days. At present, The market has fallen a lot from the high level, and whether it can fall further depends on downstream demand; PTA is still in the middle of the equipment maintenance cycle in April, and the inventory level has dropped to around the same period last year. This week, the extent of PTA destocking has been reduced, and the cost end is still certain. Support, but there is room for decline when supply returns in the medium term; currently, short fiber processing fees are close to the cost line, with good bottom support, and terminal demand has not substantially improved. The market is mainly based on rigid demand based on purchase and purchase, and a large number of stocks are being stocked. The behavior has not yet occurred. Overall, PTA supply and demand may be expected to weaken under the influence of increased supply and accumulation of inventory. The short fiber market has insufficient positive support signals, and the market and spot gains may not be sustainable. In the near future, there is a possibility that both of them will break through the previous high. Maybe not much.
��The spot rally may be difficult to sustain, and it may be unlikely that the two will break through their previous highs in the near future.
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