In September, whether it is weaving or polyester products, the market has basically improved significantly compared with the previous months. Especially in weaving, most companies have made autumn and winter fabrics. The order-taking situation has improved, and the operating rate of looms in Shengze has increased, now rising to about 72%. In terms of polyester filament, prices have also stabilized recently, and production and sales have also picked up compared to the previous period.
But when the market seemed peaceful, PTA stocks surged again! As of now, PTA inventory has climbed to around 3.38 million tons, setting a new high in recent years.
Since this year, affected by the epidemic, PTA inventory It has been in an upward channel, and high inventory has become one of the important reasons for suppressing the PTA market. Affected by OPEC’s recommendation to extend the compensation period for production cuts, the impact of Hurricane Sally on the oil and gas production and processing of the U.S. Gulf Coast, and the significant decline in U.S. commercial crude oil inventories, international oil prices rose sharply last week, and light crude oil futures rose sharply throughout the week. rose 10.13%, and Brent crude oil futures rose 8.34% throughout the week. Generally speaking, rising crude oil prices will drive up the price of polyester products, especially PTA, which is more sensitive to the trend of crude oil. However, when the crude oil market strengthens, the spot price of PTA futures continues to fall. It can be seen that high inventory has a negative impact on PTA. The recovery of the market is a huge drag, and even the strength of crude oil cannot drive it.
On the 21st, international crude oil prices fell by more than 4%, and PTA futures spot prices continued to fall. It is foreseeable that PTA has begun to go downhill due to its high inventory status. , so, what are the factors causing its high inventory?
1. Supply and demand imbalance
As we all know, the PTA in 2020 It will enter a production capacity expansion cycle, and the annual production capacity growth rate is expected to be 25%, which is much greater than the 5% growth rate of downstream polyester production capacity in the same period. Since this year, 6.6 million tons of PTA have been put into production, and nearly 8 million tons of PTA devices are expected to be put into operation in 2020. The PTA supply pattern continues to grow.
material. In addition, the fourth quarter is about to begin, and the 2.2 million-ton unit of the second phase of the Dushan Petrochemical Project is about to start. Generally speaking, there is greater pressure on the supply of PTA, which will further increase its inventory.
2. The load is rising
After the resumption of work during the Spring Festival, PTA In fact, the operating rate has never been low. As can be seen from the figure below, in June, the PTA operating rate reached a low level after March, but it still needs to remain above 75%, which is even higher than the operating rate before this year.
PTA is at a high operating rate, which is closely related to the companies that have put new equipment into production this year. In recent years, leading polyester companies have begun to expand their layout, first of all to develop into PTA. Judging from the pace of production and the companies that have started production, domestic PTA equipment production is mostly concentrated in the hands of mainstream manufacturers, and the concentration of the entire domestic polyester industry chain will further rise. Mainstream manufacturers have basically formed a complete polyester industry chain. They are more self-sufficient in the production of PTA and have abundant funds. They are more likely to swallow up small companies when the market is chaotic. Therefore, they are not willing to reduce the load and instead step up production.
3. Polyester inventory
In addition, downstream polyester inventory is also an important factor affecting the trend of PTA inventory. Judging from the statistics of China Silk City Network, the overall inventory of the polyester market is now concentrated at 36-44 days; in terms of specific products, POY inventory is around 14-18 days, FDY inventory is around 25-35 days, and DTY inventory is around 25-35 days. to about 33-44 days.
Polyester inventory has been rising sharply since May. At present, polyester inventory is also at a relatively high level. When polyester manufacturers find it difficult to balance production and sales and there is pressure on capital turnover, it is natural to consider the demand for PTA.
4. Rebound of the epidemic
The market situation is not good this year, and the reason for the epidemic must be difficult to ignore . Due to the impact of the epidemic, the consumption of textile and apparel products in the global market has slowed down. Closures and liquidations of global apparel companies continued, and the foreign trade market struggled in the first half of the year. Not only did apparel companies cancel orders for the first half of the year, they even canceled or reduced production of autumn and winter fabrics for the second half of the year under financial pressure.
While the domestic epidemic was well under control, recently, the foreign epidemic has once again reversed dilution. On September 20, Europe’s United Kingdom, France, Italy, and Spain all sounded the alarm and entered a state of alert again! Spain has added more than 14,000 new cases in a single day, the number of new coronavirus deaths in the UK has so far exceeded 41,000, and the number of confirmed cases of new coronavirus pneumonia in France has exceeded 450,000… Europe is an important exporter of my country’s textile and clothing fabrics, and the “blockade” may be repeated again advent. The order still exists�The risk of being cancelled.
Various reasons such as supply and demand, the epidemic, etc. have caused PTA’s social inventory to continue to rise this year. The so-called “Golden Nine” has not alleviated the pressure of PTA’s high inventory. 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. However, it is still relatively difficult to significantly destock based on orders in the second half of the year.
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