At the close of trading on October 22, the PTA futures 2001 contract fell 4864 points, a decrease of 44 points or 0.9% from the previous trading day. PTA futures are “gone forever” on the way down.
At the same time, Xinjiang Zhongtai Petrochemical’s annual output of 1.2 million tons of PTA project is coming to an end, and Xinfengming’s 2.2 million tons of PTA equipment is planned to be installed this month It was put into production on the 25th… One bad news after another is right in front of us.
Today’s PTA “has a wolf in front and a tiger behind”, and is looked down upon. How did the once “infinitely prosperous” PTA fall to where it is now” What about the point where we are out of ammunition and food?”
The “bullet” is gone
In the past, no matter how other products in the polyester industry chain changed, The price of PTA always remains at a high level, and profits can be guaranteed.
For the upstream PTA “big guys”, there are also “ten thousand ways” to hype the price of PTA. Whether it is news about the economic environment, the price of crude oil, or even better polyester production and sales in a few days, it can all become reasons for PTA to rise.
When the price of PTA has a downward trend, the upstream will release some so-called benefits from time to time. It is these “bullets” that have kept the price of PTA down for a long time. Stay high.
But in July this year, unknowingly, the “bullets” were all fired, and market news could no longer affect the price of PTA, even if oil prices rose sharply. It caused PTA to rise for two days, but it would still fall back on the third day. At this time, the PTA market has entered the next stage.
“Bayoto” Sees Red
When the good news in the market cannot drive the price of PTA, nor the production and sales of polyester, it is time to “fight the bayonet”.
At this time, in order to stabilize prices, upstream PTA companies came up with another “killer trump card” – equipment maintenance.
For a competitive market, supply and demand are always an important factor affecting product prices. Therefore, in July and August of this year and even now, a large number of PTA equipment began to shut down for maintenance, and some equipment undergoing maintenance postponed their start-up plans.
In addition, the 4.7 million-ton units of Hengli and Xinfengming, which were originally scheduled to be put into operation in the third quarter of this year, have also been postponed to the fourth quarter.
This series of “bayonet fighting” behavior has indeed stabilized the price of PTA to a certain extent, but it only treats the symptoms rather than the root cause. Starting last week , PTA futures suddenly began to plummet, and the PTA market entered the third stage.
Start “melee fighting”
Time has entered the fourth quarter of 2019, and a new round of PTA device production is just around the corner. However, the downturn in the textile market has clouded the future prospects of PTA. Added a layer of shadow.
At this time, the “bullets” have been used up and the “bayonets” have been used up. It is time for various companies to engage in “hand-to-hand combat”.
Actually, there is nothing to say about “hand-to-hand combat”. Everyone has seen it a lot over the years, from polyester filament 8 or 9 years ago to PX in the first half of this year, and now the weaving market, are all in “hand-to-hand combat”.
The process is nothing more than the continuous decline of prices and the continuous increase of inventory, and then “the big fish eats the small fish”, and in the end “the leftover is king”.
What impact will the “hand-to-hand combat” in the PTA market have?
For PTA, falling prices are not conducive to destocking
Although there is a saying in the market that “small profits but quick turnover” can only be true when product prices are stable. Under the current circumstances, the decline in PTA does not help much in destocking, and this is likely to be the case this time.
“Chasing the rise and killing the fall” is a very common phenomenon in the trading market. In addition to the rigid needs of production, the more bearish the market is on PTA, the polyester factories will inevitably Be more cautious about sourcing ingredients.
Therefore, as long as PTA’s downward trend does not stop and the market does not see the momentum of “bottoming out”, PTA’s road to destocking is still far away. .
For polyester, PTA The decline may be able to reverse some profits
According to data monitoring from China Silk City Network, after mid-September, the profits of various polyester filament products have been In the midst of a volatile decline, polyester FDY even fell into a loss situation.
However, it can also be clearly seen that starting from last week, as the price of PTA began to fall, polyester profits began to correct slightly. If the price of PTA continues to fall in the future, the low profit situation of polyester filament is expected to be improved to a certain extent.
For weaving companies, The price of PTA has been falling below the bottom line, which is a double-edged sword
On the one hand, a large number of weaving companies in the textile market today are under greater financial pressure. .
At the Shengze Textile Expo last week, the person in charge of a weaving company with more than 100 water-jet looms in Wuxi revealed that the current production routine Enterprises have a lot of inventory of products, and textile enterprises generally have relatively high inventories. Enterprises basically operate at a guaranteed cost.
At this time, if the raw materials increase slightly, It may make the originally profitable business become a loss; on the contrary, if the raw materials fall a little, the originally unprofitable orders may become profitable.
But on the other hand, the raw materials The continuous decline has also affected the confidence of the weaving market.
Under normal circumstances, in addition to the direct connection between fabric merchants and weaving enterprises, there is also a large part of gray fabric sales. Transactions need to go through intermediary traders. In previous years, traders’ stockpiling was also an important means for weaving companies to destock.
However, with raw material prices continuing to fall, Under this situation, traders are bearish on this market and have low willingness to purchase gray fabrics. Even if the current price of gray fabrics is already very low, as long as there is still room for decline, a large number of potential buyers will choose to wait and see. For weaving companies, He said that the financial pressure caused by gray cloth inventory lacked people to share, which ultimately made production and operation more difficult.
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