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SunSirs: Increased Supply Pressure for Release of New Capacity, PTA Prices Fluctuated and Fell

January 29 2021 08:50:56     SunSirs (Linda)

According to SunSirs data monitoring, the domestic PTA spot market has maintained a volatile downward trend in the past week. As of January 28, the average domestic market spot price was 3,800 yuan/ton, down 1.13% from January 21 and down 22.20% year-on-year.

In terms of installations, the PTA start-up remained high at 87%. Although Ningbo Yisheng's 2 million ton plant has implemented planned overhaul on January 24, Fuhai Chuang's 4.5 million ton plant has resumed normal operation and was scheduled for construction on January 22. In addition, the production progress of Fujian Baihong's new device has always attracted market attention. This 2.5 million tons of new device was put into trial operation on January 21, and the product was officially launched on January 24. It is currently running half of its production capacity and the other half is scheduled to be put into production in early February. The release of new production capacity has aggravated the oversupply of PTA. The PTA supply side is still under pressure gradually, and the risk of accumulating warehouses has increased.

The crude oil in the raw material market has recently been affected by factors such as the severe global epidemic situation and the increase in US crude oil inventories. Price fluctuations have been mainly adjusted, and the cost side has weakened the PTA market. At the same time, both CICC and Fuhaichuang PX devices will resume production in the near future. Domestic supply has increased significantly, and the PX market has been adjusted mainly due to narrow fluctuations.

The downstream polyester start-up load dropped to below 80%, the demand for PTA was reduced, the supply and demand side lacked favorable conditions, and the inventory was re-accumulated. As the Spring Festival is approaching, the terminal textile factories are gradually closing their holidays, and are cautiously waiting and watching the raw materials. The market trading atmosphere is dull. The Jiangsu-Zhejiang loom has now dropped to around 60%. In the traditional textile market, the spot subscription of winter fabrics from north and south merchants has dropped, and orders are relatively limited. The overall market volume has fluctuated and declined compared with the previous period.

SunSirs analysts believe that the current crude oil price is still fluctuating near the high level in the past year, and there is still some support on the cost side. The PTA spot processing fee has fallen to around 380 yuan/ton, and the overall price is still low, which restrains the PTA decline. However, with the release of new capacity, the pressure on its own supply has increased, and with the approach of the Spring Festival holiday, the rate of loom texturing has declined significantly, the probability of a seasonal fall in polyester load is greater, the terminal demand is insufficient, the wait-and-see mood is strong, and the purchasing atmosphere Will be weak. Both the supply side and the demand side are under pressure, and the contradiction between supply and demand in the market will be further intensified. It is expected that there will be no substantial positive boost before the holiday, and it is more likely that PTA prices will remain volatile and weak.

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