Weaving "big holidays" and polyester stoppage, PTA "red envelope" market is over?

Influenced by the recent rebound in international crude oil prices, commodity markets, which have been quiet for a long time, seem to show signs of rebound in the near future.
Crude oil, regarded as "industrial blood", plays an important role in leading downstream petrochemical products. However, the large fluctuation of crude oil often affects the trend of chemical products in the short run. In the long run, it is still the fundamental factor that plays a decisive role in the price of crude oil. From the basic point of view, as the downstream weaving market ushered in the Spring Festival holidays, polyester factories entered a phased cumulative inventory cycle, PTA "red envelope" market before the festival is feared to be difficult to maintain.
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The market of polyester and weaving is cooling down obviously, and the demand will not be able to support the market to rise again.
From the current demand side, the weaving Market "cooling down" is obvious, orders are not many, factories have opened their annual holidays, traders will have holidays before the end of the month, the market has entered a "empty window period".
By January 22, construction in Changshu, Changxing and Haining had dropped to 1-20% and in Shengze to 5-60%.
Now the terminal manufacturing start-up rate has declined. With the arrival of holiday nodes, the market start-up in Jiangsu and Zhejiang will continue to decline. It is expected that after January 25, the overall market start-up rate will drop to around 20%, and the Spring Festival will be a large-scale shutdown.
Because PTA downstream is a relatively high workload industry, in recent years after the Spring Festival, there is a general trend of labor shortage, basically in January before resumption of work. In addition, the upsurge before the Spring Festival, PTA downstream industry at least half of the inventory, after the festival does not need to rush to buy raw materials. After the Spring Festival, there will be a phenomenon of accumulating stores downstream. There is pressure on funds and stocks, and there is a bias in PTA.
Recent PTA shutdown capacity is not much. Large companies had shut down their installations for a month or two before, and they restarted last week. At the same time, downstream enterprises also had shutdown overdue, but because of the rebound in crude oil and PTA prices, downstream sales improved, inventory decline accelerated, there was no implementation of the shutdown plan. However, at present, polyester is still in the process of shutdown, the start-up rate has been reduced to 79%, PTA start-up rate is 81%. So the supply has increased, the demand has weakened, and the fundamentals are not optimistic.
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Short-term hype factor, year ago, the probability of a decline in response
In addition, from the supply point of view, last year, new production capacity was put into operation in the head enterprises of chemical industry, and this year, new enterprises were put into operation. These production not only include refined oil, but also downstream chemical products. PTA production capacity will see the inflection point of supply and demand balance. Over the past few years, PTA and ethylene glycol are relatively inadequate in domestic production capacity, so prices are relatively strong, and this year's supply will increase significantly.
So this wave of chemical market will be short-term speculation factors, the duration will not be too long. It is expected that the rate of increase will be controlled within this week, and the rate will probably decline a year ago.
Most market participants believe that the recent rise in crude oil prices has played a leading role in downstream chemical commodities. For the following crude oil prices, the industry believes that the recent OPEC production reduction and macro-economic benefits have boosted oil prices from a low level and sustained rebound, improving market risk sentiment. However, negative factors can not be ignored, and market concerns about the slowdown of global economic growth have intensified again.
The API report was neutral and Russian crude oil production hit a record high in December last year. In the short run, the rebound in oil prices is expected to continue, but there will be strong resistance after the rebound. So crude oil does not support a bull market for commodities.
Overall, PTA and Ethylene Glycol have increased considerably in recent years, but this wave of increase in energy products will not be too long. Increased global economic uncertainty has led to increased market divergence, coupled with low market confidence. Opening a red market does not mean that the overall commodity market expectations in 2019 are still weak. There are many callbacks before the market, and PTA is still in the accumulative stage of market pressure is still obvious.