The Cost Has Risen Sharply, Which Is Good For The Future Market of PTA

Price monitoring shows that for a month and a half from 2022 to the present, my country's PTA market has been fluctuating and rising. The average market price in East China was quoted at 4,963 CNY/ton in early January, and rose to 5,685 CNY/ton by February 15, an increase of 14.55%; among them, the price was the highest. The point appeared on February 8 at 5,783 CNY/ton, and the lowest point was 4,963 CNY/ton during New Year's Day, with a maximum amplitude of 16.52%.

Crude oil:

On February 14, international crude oil futures prices rose sharply. The settlement price of the main U.S. WTI crude oil futures contract was reported at US$95.46 per barrel, an increase of US$2.36 or 2.5%, and the settlement price of the main Brent crude oil futures contract was reported at US$96.48 per barrel, an increase of US$2.04 or 2.2%. Oil prices rose sharply for two consecutive trading days, hitting a new high in more than seven years, mainly due to the escalation of tensions between Russia and Ukraine; in addition, the actual increase in OPEC+ production fell short of its target, adding to concerns about tight global energy supplies.

Upstream and downstream industry chain:

CITIC Futures analysis believes that the tension in eastern Ukraine has intensified recently, risk assets have been sold off, and crude oil prices have rebounded sharply. Among them, Brent crude oil futures have mainly risen and exceeded 95 US dollars per barrel. With the rebound of crude oil prices, the polyester industry chain will benefit, and the price center is expected to continue to rise. Among them, PTA and staple fiber will benefit more in the short term. At the same time, due to the Spring Festival holiday, the inventory of polyester has accelerated to replenish, and the current polyester end is facing a state of "high inventory", "high cost" and "low cash flow". "High cost" and "low cash flow" mean the price There is little room for profit, and the digestion of high inventory may also inhibit the recovery of polyester operating rate in the short term.

In the terminal textile market, downstream terminal enterprises gradually resumed work after the holiday, and the operating rate of looms in Jiangsu and Zhejiang rose to over 35.35%. However, the epidemic situation in many places is severe, especially in Suzhou, where there have been many cases of nucleic acid positive recently. As a major textile market, the market is relatively cautious in purchasing raw materials.

In terms of PTA, the two sets of Yisheng New Material’s total 6.6 million tons of equipment were operated at a 50% reduction. Yisheng Ningbo’s 2 million tons/year PTA plant was shut down for maintenance on February 10, and Zhongtai Petrochemical’s 1.2 million tons of PTA plant was opened in early February. About 80% of the work started. Yisheng Dalian's 2.25 million-ton PTA plant is scheduled to be overhauled in early March. The specific situation is to be determined. The current operating rate of the PTA industry has dropped to around 80%. Zhenhai Refinery's 800,000-ton/year ethylene glycol plant and Guangxi Huayi's 200,000-ton/year syngas-to-ethylene glycol plant were put into operation, and the base of ethylene glycol production capacity rose to 21.895 million tons; in terms of operating rate, domestic ethylene glycol comprehensive The operating rate rose to 73.7%, the highest level since 2021. Among them, the operating rate of coal-based ethylene glycol rose to 63.7%. In addition, the operating rate of oil-based ethylene glycol is expected to be around 79.4%.

From the overall logic point of view, the cost side continues to rise due to the rebound in crude oil prices; on the supply side, the base of PTA and ethylene glycol production capacity continues to rise, but the reduction of PTA units offsets the impact of new production capacity, and the ethylene glycol operating rate has returned to The high level since 2021; on the demand side, polyester faces higher raw material costs and greater inventory pressure, which may restrict the recovery of polyester operating rates.

Market outlook forecast:

The analysis believes that crude oil fluctuates at a high level, and the cost still supports PTA. The downstream demand is slowly recovering, and the supply pressure of PTA itself is reduced. There are many positive news on the overall fundamentals. It is expected that the short-term PTA price will be mainly adjusted to strong fluctuations.

According to the analysis of CITIC Futures, affected by the rebound of crude oil, PTA, MEG and PF futures are still dominated by bargain-hunting. In terms of the relationship between strength and weakness, pay attention to the strong and weak hedging opportunities of PTA & MEG; the cash flow of staple fiber futures is at a low level, the downside risk is small, and the layout is expanded. Prompt risk factors: PTA, ethylene glycol supply expansion exceeds expected risk, polyester production recovery is less than expected risk.