Does PTA Still Have Room To Rebound When Costs Collapse?

Last week, due to cost collapse, the PTA futures market declined, but the spot market was supported by the mainstream factory buyback, and the price of the spot market had not fluctuated.

This week Zhuhai BP and Tung Kun Petrochemical two sets of equipment are facing restart, supply will increase, but the downstream polyester Rongsheng 300 thousand tons filament device is facing restart, the operating rate is still at a high level, and the demand for PTA is stable.

So at present, PX cost side support weak, PTA whether there is room for rebound in the short term?

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Production is expected to heat up, and PX prices plummet.

Since 2019, the price of PX has been decreasing gradually when the production is expected to rise.

Recently, the 1 million 300 thousand ton PX plant in South Korea stopped for some reason, and it planned to last for 10 days.

Sinochem Hongrun PX new plant was put into operation in May, and the PX plant under the second half plan is still conservatively estimated at more than 4 million tons.

At present, the PX-PTA link is still in the two quarter centralized maintenance period. This week, the domestic PX load is stable at 68.3%, and the PTA market is still out of stock.

Nevertheless, sentiment in the spot market has been fermented, and PX prices have fallen to $968 / tonne (-102), which is equivalent to PTA cost of 5643 yuan / ton (-548).

PX- naphtha oil price difference reduced to 383 US dollars / ton (-104).

However, judging from the cost side of PX, crude oil will remain strong for a short time, and the price of PX will come to life in the short term after the profits are gradually digested.

Supply pressure is still on the way, and the progress of the library is slowing down.

Last week, the domestic PTA plant operating rate was 82.33%, a slight decrease compared with before.

Hengli Petrochemical 2 million 200 thousand tons / year device delayed maintenance, supply contraction is expected to fail.

At the same time, Zhuhai BP's plant plans to resume production, and later supply will increase.

Due to the sharp fall in the price of PX, the PTA processing fee rose to a high level of 1500 yuan / ton. The company was in good condition, the maintenance plan was postponed, and the Jiaxing Petrochemical Company, which is the pre maintenance device, is expected to resume production, which determines that the supply will be further relaxed in the later stage.

In this case, PTA inventory progress slowed down significantly.

Downstream demand weakened, short-term profits still available.

Recently, the demand for terminal doesn't seem to be so strong.

The average production and sale rate of polyester in March was 79%, and the average production and marketing rate was 74% in April. The production and sales rate of polyester in the first quarter was not as good as that in the same period last year. We expressed a vague concern about the late demand of polyester. Later, we need to pay attention to the holiday of May 1 holiday and whether the terminal will have a negative effect.

But in the short term, the profit of polyester is good, and the start-up is also acceptable, which is also a boost for PTA's near demand.

To sum up, the recent part of the PTA maintenance device is restarted, the supply chain is increasing, the downstream polyester load is at a high level, and there is no obvious contradiction between the fundamentals. However, due to the weakness of the late demand, Asian PX prices continue to tumble. In the long run, the cost decline is irreversible. After May, the supply and demand margins are weakening. Whether the PTA can stabilize in the short term depends on the trend of PX. In the short term, the short term or continuation of the PTA's warmer pattern is the main trend.