Continuing last Friday’s sharp rise, PTA futures both increased in volume and price yesterday, with the 2109 contract adding nearly 70,000 lots of positions. The intraday price also hit a new high this year, ranking first among chemicals in terms of increase. Overall, the polyester and coal chemical sectors saw larger gains, while oil products were slightly weaker.
“As of Monday afternoon’s close, the PTA spot basis was basically flat, with a slight increase compared to last Friday. The split between the basis and price spread also reflects that the PTA spot market situation is not obvious. Improvement, the rise in volume and price of the 2109 contract is not only supported by fundamentals, but also driven by the power of funds.” said Zhu Lihang, analyst at Zheshang Futures.
PTA price difference has undergone structural changes
The reporter learned that 6 Since late March, the price difference between the September and January contracts of PTA futures has continued to weaken. After the recent surge, the price of the 2109 contract has changed from a discount to a premium compared to the 2201 contract.
“The current September-January contract price spread of the PTA contract has undergone structural changes, rising from around -100 yuan/ton in early June to 94 yuan/ton. The performance in recent months has been biased. Strong, the market’s strong expectations for the September contract mean that PTA futures will continue to be strong.” Dadi Futures analyst Jiang Shuopeng said.
“Structural changes reflect changes in expectations, indicating that the market is optimistic about the PTA market structure in July and August.” Zhu Lihang told reporters that from a fundamental point of view, on the one hand, the new Fengming and Hengli have successively announced inspection plans, and the start of production is guaranteed due to the rebound in downstream polyester profits. Overall, PTA is still mainly destocking in July and August. Its own supply and demand pattern is relatively strong, and due to problems with Zhejiang Petrochemical’s PX device, PX supply and demand throughout East Asia are also slightly tight, further supporting the price of the entire industry chain. On the other hand, crude oil prices continue to be strong, and the bullish atmosphere is still strong. Market participants generally believe that Brent oil prices will rise to at least US$80 per barrel, which means that PTA’s cost-side support is strong.
Judging from historical trends, it has become common for the 9-1 contract spread to fluctuate violently after June in recent years.
According to Pang Chunyan, an analyst at SDIC Essence Futures, the PTA1709-PTA1801 contract spread fell rapidly in early July 2017, reaching a minimum of -270 yuan/ton and then rebounded; PTA1809-PTA1901 The contract price spread slowly fell at the end of June 2018, then fell rapidly in early August, reaching an extreme value of 1,700 yuan/ton in September; the PTA1909-PTA2001 contract price spread fell rapidly in mid-June 2019, with the lowest reaching -800 yuan/ton.
“From the perspective of seasonal trends, it is more common for PTA structural prices to break out in the middle of the year. The reason may be that before the arrival of the traditional peak season in the second half of the year, the market’s optimistic expectations for consumption and The result of the supply contraction resonance caused by intensive maintenance in the second to third quarters.” Pang Chunyan said.
Since March this year, due to poor performance, domestic PTA manufacturers have announced equipment overhauls. In April, the amount of maintenance was huge, and equipment such as Reignwood Petrochemical and Liwan Polyester were overhauled. Later, it was not restarted as planned. In addition to the devices that had been shut down before, the long-term shutdown volume has reached more than 8.3 million tons so far, accounting for 12.6% of the current total domestic production capacity.
“Due to poor efficiency this year, foreign device production has shrunk. Therefore, my country’s PTA exports have increased significantly. The export volume in March was 339,000 tons, and remained at 200,000 tons in April and May. The above is conducive to the elimination of domestic PTA inventory.” Pang Chunyan said that although the price of PTA has risen sharply recently, its processing fees have not expanded simultaneously, so it can be considered that the increase is mainly driven by costs, with tightening supply and funds playing a role in fueling the increase .
Market rumors indicate that some factories are oversold
Faced with PTA futures prices After a sharp rise, there are market rumors that some factories have engaged in speculative short selling and exceeded their own PTA supply.
In this regard, Zhu Lihang explained that the main basis for this rumor comes from the fact that several large PTA manufacturers have continued to reduce contract goods, and some time ago, there were large manufacturers in the spot market. The phenomenon of buying back PTA.
“In the first half of this year, PTA processing fees have been poor, even forcing companies to increase maintenance in the second quarter, and some high-cost devices had to be shut down for a long time. Recently, PTA processing fees have returned. When the price exceeds 500 yuan/ton, manufacturers may choose opportunities to increase selling hedging. On the one hand, they will protect the value of future products. On the other hand, while continuing to reduce contract supply, the manufacturer’s device load has not dropped simultaneously, so there may be product inventory. There is a demand for value preservation,” Pang Chunyan said.
“Assuming that the rumors are true, some factories are over-shorted, and funds are mainly aimed at factories to boost the market. In this case, the spot side should be stronger, but the actual situation is that the spot base The difference fluctuates very little.” Zhu Lihang said that as of Monday noon, the basis difference was still -30 yuan/ton, and it only rose to a flat level after the afternoon close. The price structure of PTA formed an inverted V shape with the 2109 contract price being the highest. “From this perspective, the credibility of the rumors is not high. And if it is a targeted financial game, it is difficult to continue the high PTA price without a sharp rise in oil prices. In the future, you can pay more attention to the price changes of the PTA2109 contract. .”
The overall industry chain has a strong bullish atmosphere
The current industry The strength of the chain shows that crude oil and naphtha are relatively strong, PX weakened slightly last week, and the drive for PTA profit expansion is still not strong. Downstream polyester sales have improved recently, filament stocks have dropped significantly, and prices have risen simultaneously.
It is understood that last weekend, the production and sales of polyester yarn reached more than 100%. On Monday this week, filament and staple fiber prices also increased to varying degrees. The stocking of terminal factories also began to increase. The start-up of looms and printing and dyeing companies also increased. The entire industry chain has a relatively bullish atmosphere.Thick.
“There are still many PTA devices to be overhauled in July, and the operating rate of downstream polyester may rise seasonally. If the maintenance is concentrated, it may cause a periodic supply shortage. In addition, contract goods After reducing supply, downstream companies have to increase spot purchases, and the original idea of maintaining low inventory will also change. The increase in speculative stocking will inevitably lead to an increase in hidden inventory. In addition, manufacturing companies have increased disk hedging, and the supply of goods is locked in disk volume. increase, the supply in the spot market has therefore tightened.” Pang Chunyan said.
“At present, the load of PTA supply-side devices has dropped significantly, and maintenance has increased. With new devices expected to be put into operation, industry profits continue to be compressed , the overall load is expected to remain relatively low. In terms of downstream polyester, the current load has increased slightly, and product profits are relatively low. Benefiting from the recovery of terminal temperatures, ideal production and sales, and continued destocking to alleviate inventory pressure; terminal orders have increased slightly, and short-term support is relatively strong. The market outlook has strong expectations for the peak season in the second half of this year.” Jiang Shuopeng said that overall, the short-term supply and demand of PTA is expected to maintain a tight balance or be slightly destocked. The tight spot liquidity will only be slightly relieved after new equipment stabilizes production. Currently, cost support is strong. It is expected that the strong PTA market will remain.
It is worth noting that in the process of rising prices, the operation of the industrial chain tends to be healthy, but there is still more than a month left before the peak season in the second half of the year. “The current market optimism has led to an increase in downstream stocking and rising prices. The peak season may focus on digesting inventory, and the demand for new stocking has weakened, bringing about adjustments after expected overdrafts.” Pang Chunyan said.
Under the expectation of high inventory and high production, PTA profits continue to be compressed, and the price mainly follows the cost-end oil price. Under the expectation that oil prices are still bullish, PTA makes products with low processing time and low processing time. The principle of more is the main one. In Zhu Lihang’s view, after this round of price increases, PTA processing fees have increased significantly, and the space for further strengthening is relatively limited. “Under the premise that oil prices have not shown a significant turnaround at this stage, PTA is still bullish.”</p
