On the evening of the 11th, Eastern Time, Trump delivered a televised speech at the White House, announcing a 30-day suspension of flights between the United States and Europe, but travel restrictions did not apply to the United Kingdom.
At 9:30 a.m. local time on the 12th, the New York stock market opened. 5 minutes and 40 seconds after the opening, the S&P 500 index’s decline expanded to 7%, triggering the second circuit breaker this week, and US stocks suspended trading for 15 minutes.
Trump’s speech added fuel to the fire, further stimulating a new round of global sell-off. U.S. stocks fell into a bear market, and international crude oil quickly followed suit. As of the close of the day, the price of light crude oil futures for April delivery on the New York Mercantile Exchange fell by $1.48 to close at $31.5 per barrel, a decrease of 4.49%. On the same day, the price of London Brent crude oil futures for May delivery fell by US$2.57 to close at US$33.22 per barrel, a decrease of 7.18%.
Crude oil plummeted and market panic further intensified. PTA introduced a series of centralized maintenance plans:
Plan
It is reported that Hengli Petrochemical No. 3 2.2 million tons PTA unit will be shut down for maintenance from March 12, and it is tentatively scheduled to last for about 2 weeks;
Fuhua’s 4.5 million-ton PTA unit will be shut down for maintenance on March 12, and the maintenance time is expected to be 2 weeks;
A 900,000-ton PTA unit in southwest China will be shut down for maintenance on March 10 and will be restarted. Not yet determined;
A 1.25 million PTA device in South China will undergo a two-week planned maintenance starting from the middle of this month;
A 2.2 million-ton PTA unit in East China that was restarted near March 10 is currently operating at 50% load.
During this sensitive time period, PTA equipment is undergoing centralized maintenance, involving a production capacity of about 9.95 million tons. What is the reason?
PTA inventory has reached the “ceiling” and the price is close to the “floor price”
Since the second half of last year, PTA has been at It is weak, and the futures are difficult to reach the 5,000 mark, causing the internal price to continue to fall. Especially since the outbreak of the epidemic during the Spring Festival this year, PTA’s “luck” has not been very good. It fell by the limit on the first opening day after the holiday, and the decline has not ended.
Recently, crude oil prices have fluctuated significantly, and the cost surface has collapsed. PTA has become a “deflated ball”, with prices continuing to fall. As of the 12th, the internal price of PTA was only around 3,755 yuan/ton. Compared with the same period last year, it dropped by around 2,840 yuan/ton, a drop of more than 40%.
In addition to the unbearable price, PTA’s social inventory has also reached a high point. As of now, PTA social inventory has risen to around 2.63 million tons. PTA has been accumulating inventory since November last year. As of now, PTA social inventory is around 2.63 million tons.
At the same time, PTA’s profits are already at a low level. Although the profit margin has shrunk compared with the previous period, it is still different from previous years. Compared with the profits of up to 1,000 yuan and eating up half of the “cake” of the industrial chain in one bite, the current situation of PTA is miserable. Therefore, when PTA inventory is high, prices are shrinking, and profits are diluted, parking for maintenance is also a good way to reduce production and protect capital.
The operating rate of polyester has dropped compared with the same period in previous years, and the inventory is high
At this time in previous years, it was the traditional peak season for textiles of “Gold, Three, Silver and Four”, and polyester factories were also operating at full capacity. In the same period last year, the average operating rate of polyester factories remained around 87%. However, currently, the average operating rate of polyester factories is around 87%. The rate is around 77%, which is slightly lower than the same period in previous years.
The operating rate is not high, but polyester inventory has reached a high level in recent years. According to statistics from China Silk City Network, the overall inventory of the polyester market is now concentrated at 32-42 days; in terms of specific products, POY inventory is around 26-32 days, FDY inventory is around 27-33 days, and DTY inventory is around 27-33 days. to about 33-42 days.
Polyester factory products cannot be sold. There is a price but no market. After the operating rate is reduced, the demand for PTA becomes even greater. reduce.
Of course, whether it is the maintenance of PTA equipment or the price of polyester factories, the deepest reason is the serious lack of demand in the downstream weaving market.
Although the domestic epidemic has been basically controlled, all walks of life have basically entered a state of resumption of work, and the same is true for the textile industry. This week, the operating rate of weaving enterprises has increased significantly compared with before. According to statistics from China Silk City Network, the operating rate of looms in Shengze has risen to about 75%.
Production capacity has increased, but terminal demand cannot keep up. Although clothing wholesale markets such as Hangzhou, Changzhou, and Guangzhou have opened one after another, due to the epidemic, various clothing markets have been severely overstocked and have difficulty in capital turnover, and the demand for fabrics has decreased even further. Judging from the current situation of most weaving companies, after resuming work, they are basically making orders from the year before. The situation of receiving orders after the year is not ideal, customers are very cautious, and there is too much bad macro news, so they are basically in a wait-and-see state.
Domestic trade demand is insufficient, and foreign trade is also facing many obstacles. The COVID-19 epidemic has broken out across a large area around the world. As of 12:00 on the 12th, the number of confirmed cases of infection outside China has reached 44,483, with more than 1,000 cases in 7 countries, led by Italy, Iran, and South Korea. Italy and South Korea are also important exporters of textile and clothing products to my country. If the epidemic in these countries is not controlled, the demand for textile and clothing products will inevitably decrease. At the same time, international logistics is also a problem.
A cloth The boss revealed: “Due to the seriousness of the epidemic, Italy has been closed down. I have a customer whose 2 million meters of orders for export to Italy that were booked years ago have been cancelled. There is a lot of goods in the warehouse, and the losses are serious.”
The textile market in the first half of the year has had a bad start to the year, and there is a tendency to enter the off-season early. Although PTA, as the “big player” in the polyester industry chain, plays a cost-promoting role in the market, under the current situation, it is still unrealistic to rely solely on equipment maintenance to save the market.
The rise and fall of PTA is also largely affected by factors such as crude oil and news. Russia refused to cut production, Saudi Arabia started a price war, and the epidemic in the United States has not been controlled. These problems have restricted the growth of PTA.
Of course, under the unfavorable foreign trade situation, the decline in domestic demand is also an important factor. The textile market in the first half of the year has entered the off-season ahead of schedule, but the market in the second half of the year may be stimulated. sexual consumption. The market is transmitted from the bottom up, and it will take a long time for PTA to get rid of the current difficulties.
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