Polyester price reduction promotion PTA industry suffers losses

Affected by the continuous correction of crude oil prices on the cost side, the chemical sector still showed a weaker trend on May 14, with polyester products leading the decline in the chemical sector. The price of PTA futures in the early trading on the 14th once hit the limit of falling, and then rebounded slightly; staple fiber and ethylene glycol both fell more than 5% intraday.

　　 Supply and demand weakened, PTA prices fell sharply

　　 It is worth mentioning that the PTA futures contracts in early trading on the 14th almost collectively fell their limit. For the recent sharp decline in PTA prices, industry insiders believe that it is the result of fundamental resonances such as falling costs and weakening supply and demand.

"In March-April, due to the low processing difference, the acetic acid of the auxiliary material soared, the PTA industry fell into a loss, and domestic enterprises took turns overhauling. Among them, the equipment overhauled the most in April." SDIC Anxin Futures analyst Pang Chunyan said that CCF monthly output statistics are only There are 4.18 million tons, and the industry's monthly average operating rate is 81%, which is the lowest level since 2019. The PTA depot in April is expected to exceed 400,000 tons.

　　According to her, from April to May, large domestic manufacturers reduced their supply of contracted goods, and the tight PTA spot market led to relatively firm prices. The processing fee was restored from a low of 300 CNY/ton in mid-April to more than 500 CNY/ton. At the same time, the price of acetic acid has loosened, and the spot price of acetic acid in East China has fallen from a high of 8,400 CNY/ton at the end of April to the current 7,600 CNY/ton, and the corresponding PTA auxiliary material cost has dropped by 20-30 CNY/ton.

　　 In Pang Chunyan's view, this week's oil prices surged and fell, and the impact on the PTA market from cost to mentality was one of the reasons for the sharp drop in PTA prices. In addition to costs, weaker supply and demand in May was also an important factor in the decline in PTA prices.

According to a reporter from the Futures Daily, among the PTA devices that were shut down in the early stage, Sichuan Energy Investment 1 million tons/year, Zhongtai Chemical 1.2 million tons/year and Dushan Energy 2.5 million tons/year were restarted or planned to restart in May. At the same time, downstream polyester companies have reduced production due to rising inventories and declining profits. PTA supply has increased while demand has weakened. Compared with April, the PTA supply and demand pattern has significantly weakened.

"On the one hand, recent PTA bearish sentiment is too high, downstream polyester production and sales are unfavorable. Some major manufacturers have announced maintenance plans, and the demand side has weakened. On the other hand, the collective maintenance period has come to an end, and subsequent PTA devices have been restarted one after another, adding new production capacity. Entering the market, the contradiction between PTA supply and demand will be further amplified, and the price will continue to weaken under the combined effect of supply and demand and the cost side." Zheshang Futures analyst Zhu Lihang said.

　　 In this regard, Dadi Futures analyst Jiang Shuopeng believes that the fundamentals of PTA have gradually shifted from the previous tight to the loose in the near future. The social inventory has gradually shifted from the substantial destocking in April to the accumulated inventory, and the liquidity of the spot market has increased. PTA's new device, Yisheng New Materials, will soon put into production with a capacity of 3.3 million tons, which puts greater pressure on the supply side.

"Downstream polyester is affected by high inventories and weaker profits. Equipment maintenance plans have increased significantly, and the load is expected to fall from a high level." Jiang Shuopeng said that the current supply and demand of PTA have changed, and the increase in supply and demand has weakened. It is expected that social inventories will gradually accumulate. Price formation is suppressed.

　　Insufficient demand support, frequent price cuts and promotions

　　 The reporter learned that because the price of raw materials fluctuates too sharply, it has a great negative impact on polyester. Polyester products dominated by polyester filaments are also passively following the price adjustment of raw materials, which affects the purchasing sentiment of downstream businesses. Downstream procurement is cautious, production and sales have been sluggish for days, and filament companies passively cut prices for promotion.

　　In this regard, analysts said that there was no substantial increase in demand during the peak season of traditional demand during the first half of the year. The high cost of raw materials combined with overseas epidemic fermentation has made terminal textile and apparel demand sluggish. Since May, some terminal weaving companies have reported that orders have improved compared with the previous period. However, small-batch orders are not enough to absorb inventory, and demand is difficult to achieve substantial improvement. "Since the beginning of this year, the polyester industry's operating load has increased rapidly, with an average monthly operating rate of more than 90%, and terminal weaving operations are mostly maintained at around 70%. The contradiction between supply and demand is prominent. Therefore, the frequency of promotion of polyester varieties in the first half of the year is relatively fast."

Take polyester filament yarn as an example. In April, three rounds of concentrated preferential sales promotion, downstream bargain-hunting purchases, polyester filament yarn companies showed de-stocking effects in the short term, but the pulse-type production and sales overdraft demand in advance. After the event, the market became more and more deserted. As the frequency of sales promotion is accelerating, the timing of sales promotion has often become a downstream procurement node. Due to the pessimistic market outlook, users also purchase more on-demand to ease the pressure on raw material inventory.

"Phased promotional activities have not substantially improved the high inventory pressure of enterprises, and downstream users have mostly adapted to the mode of promotional procurement. Therefore, if there is no promotion of promotional activities in the later period, the resistance of polyester sales will further increase, and the focus of market transactions It will also continue to drop in the promotional activities. When the cash flow of the company reaches a state near the break-even line, the company is bound to consider limiting production and insuring the price. For the polyester industry, the promotion model will undoubtedly quench thirst by drinking poison." Analyst said.

Similarly, in Zhu Lihang’s view, frequent price reductions and promotions are not a good thing for the industrial chain, affecting the profits of polyester manufacturers. Polyester factories have gradually begun to overhaul, and polyester production has gradually weakened, and the rigid demand support for raw materials will also be compared sequentially. Weakened. Zhu Lihang said.

　　 At present, in the downstream polyester market, products such as bottle flakes, staple fibers and chips are already at a break-even or loss-making state, and the huge profits of filament products are also being squeezed. CCF data shows that as of last Friday, DTY and FDY inventories have been higher than the level of the same period in the past five years, and POY inventories are at a high level in the same period of the past five years.

"At present, the downstream polyester end is generally weakened, profits are compressed and inventory is high, resulting in increased equipment overhauls, and it is expected that the later load will drop significantly. The polyester terminal weaving link has entered the off-season, but the current short-term terminal orders have increased due to the impact of 618. There is still support, but later orders are still small, especially overseas orders have not yet recovered, and the overall downstream terminal demand support is still weak." Jiang Shuopeng believes that when terminal demand is weak and production and sales continue to weaken, the polyester link will be reduced through price promotion. The purpose of the library is to promote production and sales in the short term, but it cannot improve the contradiction between supply and demand.

　　 Excess is still the main theme

　　 It can be seen that the supply and demand of various varieties in the polyester industry chain are different, but as a whole, PTA and ethylene glycol are in a period of concentrated release of new production capacity, and the medium and long-term surplus is still the main tone.

"For PTA and MEG, the background this year is still a large amount of production capacity. On this basis, profits may continue to be compressed at a low level." Zhu Lihang said that from the current fundamental situation, the follow-up PTA and MEG will Entering a continuous accumulation cycle, profits will be compressed to levels near the profit and loss line. "Aside from the cost-side drive, it is difficult for the subsequent polyester chain to show a large trend in the market. We can pay attention to the opportunity for substantial price changes in the market under the influence of a short-term mismatch of supply and demand, and the opportunity for subsequent valuation corrections."

　　 In Pang Chunyan's view, the PTA processing fee rebounded to more than 500 CNY/ton in May. At the same time, the acetic acid weakened, the cost pressure was slightly eased, and the processing difference has a slight decline, but the space is relatively limited. After the processing difference is compressed to about 400 CNY/ton, PTA will once again operate close to the cost. The space and sustainability of the downward shift of the center of gravity depends on the price trend of upstream raw materials represented by crude oil.

"Currently, there are two factors affecting the price of PTA: one is the price of crude oil on the cost side, and the other is the fundamentals of PTA itself." Jiang Shuopeng said that with the weakening of the fundamentals of PTA and the expected commissioning of new installations, there will be no significant increase in crude oil prices. Under the circumstance of fluctuation, it is expected that PTA will still be under pressure, and the processing difference will remain at a low level. In the later stage, we still need to focus on crude oil prices, the commissioning of new installations, and the recovery of terminal overseas orders.

"As far as PTA is concerned, there are still 6.6 million tons/year of new equipment planned to be put into operation during the year, of which 3.3 million tons/year is expected to be put into operation from the end of May to June, and the supply side may increase or reach new highs. The downstream polyester load is relatively high. However, in the near future, some devices are expected to reduce production, and the load is expected to fall at 89%. Therefore, PTA demand will be weakened to a certain extent." Strong upward momentum, the weak adjustment may continue in the short term. Whether there is a turning point in the later period, we need to pay attention to the changes in the cost side and the self-regulation of supply and demand.

　　 In Zhu Lihang's view, the downward shift of PTA's center of gravity will not last long. “The price drop of PTA this time exceeded the drop in the cost side, resulting in a significant reduction in processing fees. With the high price of catalyst glacial acetic acid, PTA manufacturers suffered more serious losses. This situation cannot be sustained for a long time.” He said, the sentiment passed. , PTA valuation will continue to be gradually restored to normal levels.