Inventory pressure - cost drag, when will PTA warm up?

The PTA market was light during New Year's Day, and the negotiation price ranged from 5900 to 6100 yuan/ton. In January, the polyester factory gradually entered the maintenance state, and the demand declined. Later, with the resumption of polyester production inspection and PTA maintenance equipment, the PTA supply pattern will change from tight to loose. Under the unfavorable market conditions, it is expected that the PTA market will be mainly volatile in the short term.



PTA profit is still acceptable and cost support is weakened < br />.


Although PTA load dropped slightly this week, from the processing profit point of view, the current PTA production profit is still acceptable, PTA-PX price difference maintained at 900-1000 yuan/ton, compared with the current 600 yuan/ton production cost, the profit is still good. Why is PTA's profit still acceptable when downstream demand is weak? Mainly because of the weak operation of crude oil, naphtha and PX prices have also been falling. PX production spreads also fell back to $480 per ton.



The polyester plant began to decline, and the inventory was stable as a whole < br />.


Near the New Year, polyester plant began to decline, the market has fully anticipated, the current week's decline of 2% is still acceptable in the market, unless there is a collapse of the negative impact of demand on prices.



Last week, the inventory of all products in the industrial chain remained basically stable, PTA inventory was at a low level, but later faced with accumulative pressure. Polyester stocks are on the upper middle level, PX stocks are on the high side, and rumors of delayed shipment due to stock reasons have also been heard. At the end of December, Shengze grey cloth stock was high, and there were few new orders before the festival. The grey cloth stock was difficult to digest smoothly. The warmth of purchasing polyester filament in weaving factories dropped. At the end of December, the production and sales of polyester filament dropped obviously, and the average daily production and sales were more than 40% & 55%.



Starting from the overhaul of polyester filament factory, the start-up load of polyester will be greatly reduced in January, and the rigid demand for PTA in polyester factory will be weakened. Before and after the Spring Festival, it involves about 8 million tons of polyester overhaul and production capacity reduction, while PTA plant has not been overhauled at the same time, demand decline will dominate the future market, PTA market price pressure.



Overall, the upstream is affected by negative factors such as high US crude oil production and suspected reduction of Russian crude oil production. The overall crude oil movement is weak, and the cost-side support is still weak and flexible. From the downstream polyester point of view, due to seasonal changes in production and marketing is not clear, many factories ahead of schedule for plant shutdown overhaul or shutdown plans. The superimposed terminals are still in a weak state, with low production and sales and weak demand. In the absence of a significant rebound in oil prices, PTA is still running empty.