Polyester New Device "Boots" Landing PTA Crash Did Not Appear.

Last week, the new Feng Ming Dushan 2 million 200 thousand tonnes PTA plant was officially put into production. The device was supposed to start production in the third quarter of this year, but delayed for various reasons, like the boots that did not come to the ground, causing a wave of market volatility. Now that the plant has been put into production, "boots landing", Hengyi Petrochemical has successfully launched the Brunei refinery project and triggered the chain reaction of the market.

One

The crash did not appear, and PTA's performance remained calm.

As one of the most important commodities in the polyester industry chain, the market of PTA can largely represent the market of textile market, and has also received the most attention of the industry.

In the overall downturn of the textile market this year, PTA was also "deeply hurt" and caught in an awkward situation of high inventory and low profit. Under such circumstances, the commissioning of new devices in the fourth quarter was seen as a major bad profit.

The market once had a judgement. When the new Feng Ming 2 million 200 thousand ton new plant was put into operation, the price of PTA would fall again, but the fact was somewhat unexpected.

The new Feng Ming PTA device was successfully tested in October 30th, but in the next few days, PTA futures were relatively calm.

In October 31st, the 2001 futures contract of PTA futures rose 6 points, or 0.12%, compared with the previous trading day.

In November 1st, the 2001 futures contract of PTA futures fell 8 points, or 0.17%, compared with the previous trading day.

In the evening of November 3rd, Hengyi Petrochemical Co., Ltd. in Brunei refining and chemical project, after comprehensive commissioning, intermodal transportation and smooth operation, achieved the whole process of plant through and put into full operation, and successfully produced gasoline, diesel, aviation kerosene, PX, benzene and other products.

In November 4th, the main contract of PTA futures closed 2001 points at 4832 points, down 2 points from the previous trading day, or 0.04%.

It can be seen that the expected fall has not arrived. The trend of PTA futures has gone too far. But why?

01

PTA has fallen ahead of schedule.

Since mid October, PTA has started the latest round of decline. The main force of PTA futures dropped from 5192 at the opening of October 10th to 4852 at the end of October 21st, down 340 points, and the overall decline was 6.5%.

The main reason for the fall of PTA at that time was the panic of the market caused by the coming tide of the new PTA installations. Therefore, the PTA futures have finally stabilized, in a sense, there is a reason for the bad.

02

Profits have been greatly compressed and there is no downward space.

The price of PTA fell sharply after July this year, resulting in a sharp reduction in PTA profits. In October 31st, the PTA profit was only left 29 yuan / ton, compared with the profit of 1787 yuan / ton in early July.

Therefore, the current PTA has been able to talk about the drop or fall, and the market will be in a predicament even if there is a slight trouble. So this time the PTA is not going to fall, but to a certain extent, there is a lack of room to fall.

03

Polyester manufacturers, increase the maintenance of equipment.

In the case of PTA prices continue to fall and profits continue to be compressed, polyester leading enterprises have also taken actions to increase maintenance.

Specifically, a set of 600 thousand tons / year PTA plant maintenance in East China is expected to be restarted in November. A set of 2 million 200 thousand tons / year PTA plant in East China is overhauled on 26 days, and is expected to be overhauled for 12 days. A set of 2 million 200 thousand tons / year PTA plant in China is down to 5, and is expected to be restarted recently; another 1 million 500 thousand ton plant is scheduled to be overhauled in mid November; a set of 1 million tons / year PTA plant in southwest is temporarily stopping for 1-2 days.

Under such a big maintenance effort, PTA inventory dropped significantly, and PTA social inventory dropped nearly 200 thousand tons in October.

From the bad to the best, will the PTA rise?

The commissioning of the new Feng Ming 2 million 200 thousand ton PTA plant did not bring about a sharp fall in the image. On the contrary, there are many favorable factors in PTA at present, which may affect the future trend of PTA.

01

International oil prices rebound

As the raw material of polyester industry chain, crude oil can affect the price of PTA to a large extent.

Last Friday, the United States released the latest non-agricultural data, the accident is better than expected, while the international trade relations again good news, multiple factors superimposed, which makes international oil prices bottomed out. As of Friday's close, oil prices hit the biggest increase in six weeks, while the US oil rose nearly 4%, breaking the high of nearly four days to 56.33 U.S. dollars / barrel.

The rebound of international oil prices may be fed back to PTA to a certain extent.

02

Good news on Sino US trade talks

As the third largest textile exporter in China, Sino US trade relations have great influence on the development of the textile industry.

On the evening of November 1st, the CPC Central Committee Political Bureau member, the vice premier of the State Council, and the Chinese leader of the Sino US comprehensive economic dialogue, Liu He, spoke with the US trade representative, Mr. lettchet, and finance minister Mnuchin. The two sides held serious and constructive discussions on properly resolving their respective core concerns and reached consensus in principle. The two sides discussed the arrangements for further consultation.

Recently, good news has been heard from the Sino US trade talks, and substantial progress may be made in the near future.

03

In the recent survey, a distribution boss said that the market demand for winter fabrics increased due to seasonal changes. The similar products such as spring Asian spinning, nylon spinning and other conventional products were slightly higher than before. Some enterprises even said that the price of nylon spinning was even slightly higher than before.

In addition, there have been reports that some dyeing factories have issued price notices, while some dyeing factories have not lifted the price of dye, but cancelled the previous preferential activities, which can be regarded as a disguised increase in prices.

Overall, by the end of the year, seasonal cyclical changes have driven the conventional products to a certain extent.

Although there are so many good points, we still can not ignore that the stable PTA price is based on the early release and huge maintenance effort. The support of the fundamentals is still insufficient. The production of the constant Brunei device will also suppress the PX price to a certain extent and reduce the cost of PTA. And from the visit to the situation, even if the recent market slightly warmer, but most textile people for the remaining two months of this year's market is still not optimistic.

To sum up, the future PTA may remain stable or even rebound in a short time, but in the long run, it is still mostly empty.