New Capacity Releases Supply Pressure Increases PTA Price Falls

According to price monitoring, the domestic PTA spot market has maintained a fluctuating downward trend in the past week. As of January 28, the average spot price of domestic market was 3800 yuan / ton, down 1.13% compared with January 21, and 22.20% lower than that on January 21.

In terms of plant, PTA start-up maintained above 87%. Although Ningbo Yisheng's 2 million ton unit has carried out planned maintenance since January 24, the 4.5 million ton unit of fuhaichuang has resumed normal operation, and the material will be discharged on January 22. In addition, the commissioning progress of Fujian Baihong new plant has always attracted market attention. The 2.5 million ton new unit was put into trial operation on January 21 and officially put into production on January 24. At present, half of the production capacity is in operation, and the other half is planned to be put into production in early February. The release of new capacity aggravates the situation of PTA supply surplus, PTA supply side is still gradually under pressure, and the risk of accumulation is increasing.

Due to the severe global epidemic situation and the increase of crude oil storage in the U.S. crude oil market, the price of crude oil has been adjusted mainly due to fluctuations, and the role of cost side in promoting PTA market has been weakened. At the same time, CICC and FHC PX units will resume production in the near future, domestic supply has been significantly improved, and the PX market is mainly adjusted in a narrow range.

The downstream polyester start-up load decreased to below 80%, the PTA demand decreased, the supply and demand side was not good, and the inventory was re accumulated. With the Spring Festival approaching, the terminal textile factories are gradually taking a holiday to finish finishing the work. They are cautious about the raw materials. The market trading atmosphere is flat. The weaving machines in Jiangsu and Zhejiang have dropped to around 60%. In the traditional textile market, there is still a decline in the spot subscription of fabric from north and South merchants in winter, and the order undertaking is relatively limited, and the overall market turnover is lower than that of the earlier period.

Analysts believe that the current crude oil price is still fluctuating near the high level in nearly one year, and there is still some support at the cost side. The PTA spot processing fee has fallen to around 380 yuan / T, which is still on the low side as a whole, thus inhibiting the decline of PTA. However, with the release of new production capacity, its own supply pressure increases, and with the approaching of the Spring Festival holiday, the elastic work rate of looms obviously declines, the probability of seasonal decline of polyester load is large, the terminal rigid demand is insufficient, and 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 festival, and PTA prices are likely to remain weak.