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[Industry Focus]：PTA market under the imbalance between supply and demand, how to go after the market?

Read： 358 Time：4months ago Source：Zhuochuang Chemical

1. PTA capacity operating rate is high, supply pressure depth analysis.

At present, the capacity operation rate of PTA market continues to remain at a high level of more than 86%, which indicates that the domestic PTA production plant is operating at almost full capacity. This high run rate not only reflects the positive attitude of manufacturers, but also reveals the strong pressure on the supply side of the market. At the end of the off-season, although some units are temporarily shut down due to maintenance or failure, the supply of PTA is still increasing. This oversupply situation makes the market generally expect PTA inventories to continue to accumulate, thus suppressing market prices.

Further analysis shows that even though some suppliers have announced large-scale maintenance plans, such as two sets of PTA units totaling 4.7 million tons in the northeast region, most of these maintenance are planned and the market has fully expected this. Therefore, the actual impact of these maintenance plans on the market is limited, it is difficult to effectively alleviate the situation of oversupply. In addition, the continued sale of forward sources by major suppliers is further evidence of the adequacy of the current PTA supply, which has a direct negative impact on market prices.

PTA 产能运行率图.jpg

The turning point of 2. demand is not yet in the peak season, and the market mentality is analyzed in depth.

From historical data, late August to early September is often regarded as a turning point in the off-peak demand season. This year, however, is different. Although the machine start-up rate rebounded after bottoming out in early August, this rebound was more due to the oversold rebound caused by the previous high temperature weather, rather than the real demand recovery. The finished product inventory of the terminal weaving factory is still rising, indicating that the market demand is still weak.

In this context, the profits of terminal bombs, weaving and other links are severely squeezed. The decline in the polyester raw material market has led to the depreciation of some finished product inventories, further exacerbating market uncertainty. At the same time, the poor domestic trade data and the double pressure on exports (trade friction and foreign economic downturn) make the market mentality more cautious. The game deadlock between weaving factories and polyester factories is difficult to break quickly, and the power of demand recovery is obviously insufficient.

织机开机率对比图.jpg

3. the deep-seated reasons for the lack of short-term market confidence and the volatility of the market.

The lack of short-term market confidence is PTA Price one of the important reasons for the small drop in shock. In the absence of obvious positive factors to support, market participants generally take a wait-and-see attitude. From a cost-driven perspective, the fermentation of geographical issues may have some impact on crude oil prices, but at present this impact has not been significantly transmitted to the PTA market. The adequate supply of PX and the relative weakness of the market also limit the cost support of PTA.

From a demand-driven perspective, the arrival of the traditional peak demand season will take time and uncertainty. The game deadlock between the weaving factory and the polyester factory and the limited purchasing enthusiasm of the terminal enterprises have made the demand recovery insufficient. Therefore, in the absence of effective demand support, the PTA market is difficult to form an effective upward momentum.

The continuing impact of 4. oversupply and the underlying drivers of the market decline

oversupply is one of the main problems facing the current PTA market. Although some units are temporarily shut down due to maintenance, they are mostly planned and have limited impact. In the context of the appreciation of the RMB exchange rate and the decline in the PX market, PTA processing fees remain at a high level, which gives manufacturers sufficient motivation to maintain high-load operations. Therefore, it is difficult to have large unplanned device shutdowns in the short term.

In addition, the positions in the PTA futures delivery warehouse are about to expire, and the probability is that these positions will flow into the in stock market to further increase market supply. This situation of oversupply will make the PTA market continue to face greater downward pressure in the future. At the same time, the market's high short atmosphere will continue to exist to form further suppression of market prices.

5. Conclusions and Prospects

the PTA market is currently facing the dual pressure of oversupply and off-season demand, and the market is short at high prices. In the short-term cost push up and demand season scenario is expected to be difficult to meet the situation, the PTA market is expected to show a small shock down trend.

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