High Inventory Dragged Down PTA Prices In A Downturn

From the perspective of supply and demand, the pressure on crude oil inventory is still large, and the oversupply situation has not been significantly alleviated.

EIA data showed that as of March 20th, the US crude oil inventories increased by 8 million 200 thousand barrels to 466 million 700 thousand barrels a 80 year high, while Cushing's delivery capacity had already been 80%.

Although the Yemen war and Iran nuclear talks in the Middle East both affect the mentality of traders, as the storage capacity of Cushing's deliveries is nearly saturated, the downside risks of international oil prices rebound to the pre trading intensive areas.

As Asia's PX capacity is in excess of PTA, the rebound of crude oil is not enough to lift its price. More fluctuation is the downstream device. We can say that the weakness of PTA industry is also a drag on the operation of PX enterprises.

Last week, the Asian PX plant continued its maintenance at the beginning of the month, with a total operating rate at 72%.

If the cost of PX naphtha cracking is measured at the cost of 350 US dollars / ton, the overall loss of Asian PX unit in March will be considered. In view of the increasing probability that PTA is constrained by high inventory or reduced start up, Asian PX enterprises will have further power to reduce load.

current

The load has been raised to 79%, and the supply and demand is in equilibrium when compared with the operating rate of PTA68%.

In mid March, we predicted that the PTA producers would once again implement last year's joint production reduction strategy in the light of the bleak effect. Similar rumors have been heard in the market.

But Yisheng Petrochemical early production cut 10% - 20% has returned to normal, 20 days began to stop the Xiang Lu 4 million 500 thousand tons of equipment in Zhangzhou only planned to overhaul 1 weeks, early in the month due to troubleshooting of Zhuhai BP110 million tons have also been functioning normally.

PTA industry leading behavior inevitably let the market guess: United

The possibility of decline.

Does the liquidation of Far East Petrochemical make producers aware that this is a good opportunity to clear excess capacity? If the minimum level of maintenance is maintained at present, the PTA industry will not be able to stock up, and nearly 2 million 500 thousand tons of social inventory is basically equivalent to a month's consumption of polyester.

terminal

Before the Spring Festival, more than 20 days of raw materials were collected, and in late March and early April, the time spent on raw materials was depleted. Enterprises had the demand for replenishing raw materials, and the price of silk was basically at a historical low. There were also some speculative needs. Last week, polyester production and marketing increased.

However, under the condition that polyester raw materials are not strong enough, there is not enough enthusiasm to catch up in the downstream, and just need to purchase or phased small batch stocking become a common mode of operation for enterprises.

In March, polyester enterprises were hovering around the cost line. Last week's phased production and marketing recovery did not help to consume inventory. Polyester stocks had been very low for the first three years, and prices were also weak.

In addition, in March, a total of 1 million 350 thousand tons of polyester filament device was put into operation, and the enterprises that had just entered the market would inevitably seize the share at a low price, which would certainly weaken the mentality of raising prices for the original filament enterprises.

In short, geopolitical factors will only temporarily boost crude oil.

In addition, PX - PTA - polyester - elastic weaving industry chain, upstream raw materials to inventory pressure mountain, downstream needs to keep low inventory operation flexible.