On December 6 local time, after a two-day production reduction meeting held in Vienna, Austria, OPEC + organization, composed of oil producing countries such as the organization of Petroleum Exporting Countries (OPEC) and Russia, reached a new production reduction agreement. OPEC + decided to increase the original production reduction of 1.2 million barrels / day to 1.7 million barrels / day by the end of March 2020. Surprisingly, Saudi energy minister Abdul middot Aziz also said that he would further cut production sharply on the basis of OPEC +'s agreed production reduction, which would reduce production by another 400000 barrels / day on the basis of the production reduction quota, which means that the total output reduction of OPEC + reached 2.1 million barrels / day. In terms of sustainability, Saudi Arabia's production would be the lowest level since 2014. OPEC + will eventually reduce production by 2.1 million barrels per day, which is equivalent to 2.1% of the current global crude oil demand.
Under the support of crude oil cost end, polyester raw materials also rebounded recently. PTA is affected by the new production of the device, and this year it is in a weak running situation. Since the first phase PTA plant of Dushan energy in xinfengming was newly put into operation in October, the PTA processing section has fallen all the way, once falling below 400 yuan / ton. Although there is still a small profit for some new installations, the overall profit level has shrunk significantly compared with that before. At present, the main transaction price of PTA market closed at 4830 yuan / ton. From the perspective of the whole polyester industry, the total start-up of polyester industry is currently down to 86.42% due to the impact of Hengsheng overhaul, Yuanfang restart, xinfengming overhaul, etc. Although more maintenance is expected in December, polyester construction is still slightly higher than that of the same period last year, up 2.98 percentage points from the same period. Therefore, in the short term, the demand of polyester for the raw material end is indeed supported.
Since November, there have been stops for polyester terminal weaving and texturing, especially in some parts of the weaving sector; and the polyester sector has also released maintenance and production reduction plans before and after the Spring Festival.
The terminal concentrated on accelerating parking in late December. The high stock of grey fabric in the fourth quarter makes the cash flow of weaving factory slightly tight. Near the Spring Festival, many weaving factories need to return funds for shipment. On the one hand, they pay wages, on the other hand, they pay for reducing materials and prepare new materials. It's difficult to ship, especially the water jet grey fabric, but the capital is tight, plus the weak judgment of the overall raw materials and product prices before, the production enthusiasm before this year is relatively low. Therefore, from the current terminal loom stop feedback news, the Spring Festival holiday time of this year's loom is ahead of schedule. Up to now, the operating rate of Jiangsu and Zhejiang looms has declined to 62%, which is expected to drop to 40-50% by the end of December, and to 55% in December.
At present, polyester factory stock pressure is limited, but the profit level is not optimistic. POY and FDY have all entered into losses. Before and after the Spring Festival, many plans for maintenance and production reduction of polyester plant have been issued. In addition to the original maintenance plan, some factories have increased new maintenance volume, such as Tiansheng, Dawo, etc. From December to January, the polyester plant will reduce the production of about 9.5 million tons / year. Among them, in the first ten days of December, after some maintenance and production reduction, the maintenance volume is less in the middle of the month, but the period from the last ten days of the month to the middle of January is the most concentrated period of maintenance and production reduction. The low polyester load is expected to be around 75% in mid January. At present, polyester POY is the highest cumulative proportion in polyester maintenance forecast, while FDY is relatively low due to the original start-up, so further reduction of production is limited.
To sum up, PTA supply is regulated by plant maintenance in the short term, and the overall market supply is acceptable. However, with the implementation of the maintenance plan of polyester plant, the overall support of polyester demand end is insufficient. Considering that at the end of this month, 2.5 million tons of Hengli phase IV and 1.2 million tons of new units of Xinjiang Zhongtai will be put into operation, PTA will maintain weak operation before the Spring Festival. In the later stage, we should focus on the macroeconomic situation and the trend of international crude oil prices.
