Recently, PTA has plummeted by 1,000 yuan/ton!
On the futures side, since April 4, the PTA continuous contract has dropped from 6,398 yuan/ton to 5,244 yuan/ton, a drop of 1,154 yuan/ton, a drop of 18%! On the spot side, since April 4, PTA’s internal market has dropped from 6,450 yuan/ton to 5,698 yuan/ton, a drop of 752 yuan/ton, a drop of 11.66%!
What is the reason that caused PTA to fall from high to low in one fell swoop?
The cost side dropped significantly
First of all, naturally from the cost side, PX, as the main cost aspect of PTA, has also experienced a large decline. PX, which had a relatively high price in the early stage, was greatly affected by crude oil. Since April 4, the price of PX has dropped from 1,124 yuan/ton to 1,010 yuan/ton, a drop of 10.12%. The reason for the decline of PX is not only affected by crude oil, but also because the supply of PX is no longer tight and has gradually increased and become sufficient.
According to the maintenance announced by the company, domestic PX output is expected to be close to 2.6 million tons in May, and industry output has once again returned to the previous high level. After June, with the return of maintenance equipment and the subsequent commissioning of the second phase of CNOOC Huizhou PX unit, it is expected that the domestic monthly PX output will exceed 2.8 million tons.
The supply is sufficient and the inventory is beginning to accumulate.
On the supply side, when the supply of raw materials is no longer a bottleneck, the supply of PTA, which has excess production capacity, will recover faster. After a significant destocking in March and April, the overall supply and demand pattern of PTA in the second and third quarters will shift to overstocking, and social inventory will also begin to accumulate at a low level. In particular, explicit inventory will recover quickly, and the tension in early spot goods will be alleviated. At present, the overall load of PTA is 77.72%, which is relatively high. At present, there is no news of major PTA overhaul, so the supply of PTA is very sufficient in the short term.
Low demand, imbalance between supply and demand
In terms of demand, it is already May, and the weaving operation rate in Jiangsu and Zhejiang has increased to about 70%. However, it has obviously reached a bottleneck, and there is little room for further improvement in a short period of time. The economic environment is not good, and the demand for terminals is only so small. There is no point in increasing the operating rate. The excess inventory produced will eventually become a useless waste that squeezes out working capital.
Judging from the downstream stocking situation, the entire textile and clothing terminal does not have no demand for raw material procurement, but more and more adopts the method of price selection. The current low level of weaving raw material stocking is largely due to the continued high prices in the early stage of the raw material end. Under such circumstances, it is difficult to release the potential of PTA from the demand side, but the production capacity of the PTA factory is there, and the equipment that has been put into production in the past few years is about to be put into production. The situation of oversupply of PTA will be very difficult in a short time. be resolved, there is a huge risk of accumulated inventory.
In addition, downstream polyester inventory is also an important factor affecting PTA inventory trends. Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated in 19-30 days; in terms of specific products, POY inventory is around 21-30 days, FDY inventory is around 19-28 days, and DTY inventory is around 19-28 days. to about 17-29 days.
Polyester inventory has been rising sharply since April. At present, although polyester inventory is at a relatively low level compared with previous years, when polyester manufacturers find it difficult to maintain stable production and sales and there is pressure on capital turnover, Naturally, the needs of PTA are taken into consideration.
Various reasons such as cost, supply and demand, etc. have all caused the recent collapse of PTA. The “Gold, Three and Silver” period has also ended. In the rest of this year, if the market shows signs of significant recovery, PTA will definitely be able to remove a wave of inventory. Otherwise, even if the cost side falls, PTA’s own price will not be “Can’t stop the car” and plummeted.
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