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SunSirs: There are Still Negative Factors, and the PTA in the Chinese Market Continues to Rebound with Insufficient Momentum

November 05 2020 09:33:15     SunSirs (Linda)

According to SunSirs price monitoring, after more than 10 days of continuous decline, the PTA market today (November 3) showed a slight increase. The average spot market price of the day was 3,252 yuan/ton, which was 0.27% higher than the previous trading day and down year-on-year. 33.93%. PTA main futures (2101) closed up, and the main futures closed at 3,380, up 26 from the previous trading day, or 0.78%. The upstream crude oil stopped falling, and Yangzi Petrochemical’s PTA device was overhauled, temporarily suspending the market’s fear of falling.

Recent changes in domestic PTA devices (Unit: 10,000 tons/year)

With the restart of 2.2 million tons of Hanbang Petrochemical, 650,000 tons of Yizheng Chemical Fiber, and 2.2 million tons of Hengli Petrochemical, the operating rate of the market has reached 86%, and the second phase of Dushan Energy's additional 1.1 million tons of new PTA production capacity will be launched soon. End pressurization still exists. Today, Yangzi Petrochemical announced that it plans to start overhaul of its 350,000-ton plant, which can ease the supply pressure of PTA to a certain extent.
The price of the crude oil market rebounded slightly on November 2, and the closing price of WTI crude oil futures was 36.81 US dollars per barrel. The demand for heating in winter has led to a further increase in the demand for crude oil. At the same time, the OPEC+ alliance is considering delaying the planned increase in January. These are all contributing to the rise in crude oil prices.
However, compared with October, the downstream polyester market began to return to rationality in November, and the wait-and-see sentiment of the market rose. Whether it is textile enterprises, weaving mills or traders, they are basically cautious. The polyester starting load is around 86%. . In terms of prices, the quotations of polyester filament factories are temporarily stable, and mainstream factories in Jiangsu and Zhejiang provinces polyester POY (150D/48F) reported 5,200-5,500 yuan/ton. In terms of operating rate, the comprehensive operating rate of looms in Jiangsu and Zhejiang is around 93%. As of November 3, the operating rate of water jet and air-jet looms in Shengze is around 80% to 90%. In terms of inventory, as of November 3, the inventory of grey cloth weaving in Shengze was more than 40 days, and some manufacturers were unable to level the production and sales, and began to accumulate inventory.

SunSirs analysts believe that the short-term rebound of international crude oil prices is positive for the cost side. However, the current PTA spot is sufficient, processing fees are high, and new production capacity is about to be launched. The downstream polyester demand market lacks confidence, and it is expected that the PTA market will continue to rebound.

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