Recently, the PTA futures market has staged such a scene: The PTA market has shown continued signs of recovery after the Spring Festival. On February 14, the PTA price even reached the 6,000-point mark, and the price also hit the highest level since September 2014. However, things are unpredictable. After the daily increase in positions reached a high, the price plummeted. The main PTA contract 1705 fell by more than 2% for two consecutive days, falling back to the pre-holiday level. It can be said that it returned to before liberation overnight.
After more than two years of bear market, PTA regrouped in 2016. Bulls became more courageous and rebounded to a maximum of over 5,900 points. In the eyes of many researchers, 6,000 points is a life-and-death line for the PTA market. This time, can it break through again after retracing 6,000 points, and where will it go?
The psychological barrier of the thousand-digit hourly mark, the “watershed” for PTA’s long-short transition
According to the author’s comparison of the market trends of PTA futures over the past three years, I found that PTA will face significant market fluctuations every time it reaches the thousand-digit integer mark.
The last time such a situation occurred was in June 2015, when the PTA price was near 5,000 points, but then the PTA futures price plummeted, falling from a high of 5,200 points for nearly 6 months to around 4,300 points. Looking back further, in June 2014, the PTA futures price of 7,000 points also took nearly 5 months to fall to around 4,500 points; similarly in August 2013, when the PTA futures price reached a height of 8,000 points , falling to around 6100 points for 6 consecutive months…
It can be said that the thousand-digit mark is the test point of PTA pressure and the “watershed” for long-short conversion.
PTA futures price difference narrows, short-term downside space is limited
The fundamental driving force for the rise of PTA during the Spring Festival came from the maintenance of PX equipment. However, in terms of increase, PTA was ahead of PX, which caused the PTA market to start early. In addition, it suffered from the impact of the overall rise and fall of domestic commodity futures. This led to the PTA futures market rising and falling, which suppressed the PTA market in the short term. However, judging from the recent price difference between futures and current prices, spot prices did not fall significantly in the past two days, and the decline was significantly smaller than that of futures, indicating that the speculation of funds outweighed the fundamentals. , and the narrowing of the basis gap will also change the downward mentality of funds towards PTA.
On the other hand, it is difficult for the short-term market bullishness of PX to significantly reduce the cost of PTA. Calculated based on a processing fee of 600 yuan/ton, the cost of PTA calculated based on PXACP is about 5,500 yuan/ton, and the recent average daily price of PX is calculated as the cost of PTA. It is around 5,590 yuan/ton, so there is still room for PX to rebound in the later period, and the cost support for PTA will also be enhanced.
Data shows that polyester POY, FDY, and DTY inventories after the Spring Festival this year are 12, 18, and 24 days respectively, which are 8, 2, and 4 days lower than last year’s Spring Festival. At present, the inventory of polyester factories is still lower than the normal average inventory level. In the coming March-April, the market may benefit from the maintenance of PX equipment. In addition, the increase in the start-up load of the weaving end will support future polyester demand. .
Generally speaking, with rising expectations, the PTA1705 contract will gradually widen the gap with the spot price, and there will be strong support at the current price in the short term. The favorable maintenance peak in the upstream PX market and the tight supply are expected to boost the cost of PTA. At the same time, the demand for polyester in the downstream is strong, and replenishment is actively driving PTA consumption. With the combination of upstream and downstream benefits, PTA futures prices are expected to rise again, but whether the futures price can break through 6,000 points still depends on the degree of cooperation of the spot.
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