"Three Branches" Increase Supply PTA Easy To Fall, Difficult To Rise

With the collapse of cost, PTA enterprises' production profits have been raised, and profit driven has led to the collapse of industrial alliances.

Under the background of rising operating rate, increasing supply pressure and insufficient digestion capacity of downstream polyester, the price of PTA will be easy to fall and difficult to rise in the future.

Oil prices are showing signs of stopping, PX will not change.

Entering the October, international crude oil prices fell into a unilateral downward trend. There are three reasons behind this: first, the global economic growth is slowing down, and the outlook for energy demand is expected to be lowered.

It is understood that OPEC and the US Energy Agency recently lowered their outlook for global oil demand in the next two years.

Second, the supply side pressure is not decreasing, and the increase comes from OPEC and the United States.

According to the relevant survey, OPEC's oil output jumped to its highest level in the past two years in September, while shale oil production in the United States was also accelerating. In mid September, the daily output jumped from 8 million 500 thousand barrels to 8 million 800 thousand barrels, the highest in nearly 30 years.

Third, demand shifts to seasonal low season.

The gross profit of global refineries is declining gradually. 9 and October are the peak period for centralized maintenance of refineries, and the scale of maintenance is bigger in October.

Refineries in the United States have begun to repair, and there is still room for a slowdown in the future operating rate.

With the decline of international crude oil prices, the price of PX in Asia has not been kept up recently. Spot valuation has dropped to around $1170 / ton from the US $1250 / ton before the national day, which directly led to a decrease in domestic PTA production cost of about 300 yuan / ton.

As the price difference between naphtha PX and MX PX is still significantly higher than the breakeven line, the enthusiasm of PX manufacturers in Asia is still maintained, and there is little possibility of short-term overhaul.

As the saying goes, "there is no permanent friend, only permanent interest."

This sentence was verified on the three big supply giants of PTA.

It can be seen that under the pressure of survival, since May this year, PTA industry giants represented by Yisheng, Hengli and Xiang Lu have reached a price agreement, forming "

Strategic alliance.

By reducing the load of PTA production plant and increasing the price of raw materials, the price of PTA market can be boosted so as to relieve the pressure of production.

But for a while,

The high price of PX brought about by the high operation has made PTA enterprises unprofitable, but at the moment, the price of oil is falling, so that PX prices continue to go down, and the profits of PTA enterprises have increased substantially.

The price Union, which is suitable for the difficult times, has collapsed and driven by interest drive. Hengli Petrochemical has been operating at around 80% in September, obviously higher than the agreed level in the alliance agreement. In the near term, the Yisheng Petrochemical Company and Xiang Lu petrochemical company also increased the PTA operating rate to more than 70%.

Under the demonstration effect of "three branches", some PTA small and medium sized enterprises also have sufficient power to maintain full load operation and expand the intensity of "dumping".

The collapse of cost caused PTA traders to panic selling, while polyester factories mainly focused on digestion and inventory, and procurement demand was not strong.

From a seasonal perspective, with the approaching winter, the terminal loom operating rate will further decline, will reduce the demand for polyester.

In addition, from this year's overall performance, the export volume of clothing and textiles has increased significantly lower than last year, resulting in less enthusiasm for polyester manufacturers throughout the year, and low inventory strategy for raw material PTA procurement.

PTA industry is huge. After "three branches", it is difficult to expect the supply increment to be digested by the polyester industry. The intensification of the contradiction between supply and demand will probably lay the foreshadowing for the next round of PTA exploration.

Yesterday, the domestic PTA price stabilized and rebounded, mostly due to the technical amendments to the recent price collapse. The phenomenon of the discount of the far months between the contracts also implied that the future market's faith in PTA's bearish didn't waver.

Under the background of the continuous downturn of crude oil prices and the weak operation of PX, the imbalance between supply and demand caused by short-term expansion of PTA will force its price to show a trend of easy to fall and difficult to rise.