Accumulation or beyond expectation PTA section will continue to explore

During the Spring Festival, major public health events broke out in China. Based on PTA (4470, - 338.00, - 7.03%) industrial chain, from the perspective of PTA cost end, supply end, demand end and inventory end, there was short-term bad in each link to a certain extent, which was mainly reflected in the following two aspects: first, international crude oil led PX price to weaken significantly, and PTA became a major player Second, supply and demand mismatch, PTA or unexpected accumulation. To sum up, it is expected that PTA will continue to decline after the festival. It is suggested to maintain the idea of selling short at high price. The target below is temporarily focused on 4600 CNY/ton. In terms of PTA option operation, the PTA volatility will rise sharply under the influence of sentiment in the short term. However, as the market digests the pessimistic sentiment, the PTA volatility will return to normal. In terms of operation, it is recommended to sell ta05c4650 and ta05p4550 of other positions at the same time in case of high short-term volatility.

Cost end: crude oil plummeted PX price weakened significantly PX followed by crude oil, PTA cost center of gravity moved down. Influenced by major public health emergencies, international crude oil fell sharply under the guidance of weak demand and risk aversion. During the Spring Festival holiday, international crude oil fell nearly 7%. However, the collapse of international crude oil price also brought about a sharp decline in PX price. As of January 30, PX FOB South Korea and pxcfr Central Taiwan were $745 / T and $763.5 / T respectively, down $29 / T and $28.5 / T respectively from the closing price on January 23. The decline of PX price at cost side will make PTA cost center further move down and lack of support at the bottom.

Supply side: high load operation and supply pressure of PTA plant during the holiday period, and the load of PTA plant reached a new high in the same period of four years. As of January 23, 2020, the PTA unit load is 90.42%, while that of 2016-2019 is 61.96%, 72.12%, 76.05% and 77.22% respectively. PTA device load has reached a new record, mainly due to the new PTA device put into operation, the overall operation of the device is stable, and the market expects that the PTA surplus will be further intensified in the future, so PTA production enterprises will speed up the pace of production under the remaining processing costs. High load operation of the new device, insufficient PTA maintenance follow-up, high market supply pressure. From the perspective of new units, Xinjiang Zhongtai and Hengli Petrochemical are both put into production before the festival. At present, the above units are in normal operation. The current load of Xinjiang Zhongtai (1.2 million tons / year) is 70% and that of Hengli Petrochemical (2.5 million tons / year) is 90%. From the perspective of plant restart, Hainan Yisheng (2 million tons / year) and Ningbo Yisheng (2.2 million tons / year) had planned to be overhauled in the first quarter of 2020, but the overhauling plan had been cancelled on January 22; yishanhua (2.25 million tons / year) had been restarted on January 27. From the perspective of unit maintenance, at present, only the PTA units of Yisheng Ningbo (650000t / a) and Huabin Petrochemical (1400000t / a) are in follow-up maintenance, and the overall maintenance follow-up strength is insufficient. Under the high load operation of new units, combined with the restart of some units and the cancellation of the post maintenance plan, the PTA market supply pressure is great.

Demand side: poor short-term demand for delayed start-up of downstream PTA downstream demand side industrial chain is "PTA polyester textile weaving". This major public health emergency will affect the direct demand of PTA from the following two aspects: first, the short-term consumption demand of terminal textile weaving is restrained; second, the polyester start-up is not optimistic, and the expectation of PTA demand recovery is falsified. (1) The demand of textile and garment industry is restrained in a short period of time. From the perspective of terminal textile and clothing industry demand, affected by this major public health emergency, referring to similar events in 2003, the overall textile and clothing demand will be restrained in the short term. The textile and garment industry is labor-intensive. During the Spring Festival, affected by the holiday, the operating rate of Jiangsu and Zhejiang loom factories dropped to 8.3%. At present, Shanghai, Jiangsu, Zhejiang, Anhui and other places have postponed the resumption of work to 24:00 on February 9, 10 days longer than the original holiday. Referring to Fig. 3-1, about one week after resumption of work, the loom operation rate can be restored to 30%, and 3-4 weeks can be restored to more than 80%. Considering the impact of the epidemic, the demand of the textile and garment industry will be in a downturn in the short term, and the loom operation rate will rise slowly or slowly compared with the previous years. It is expected that the loom load will be around 30% from the end of February, and it is expected to recover to 70-80% in the first ten days of March. (2) Polyester enterprises delay to restart PTA short-term demand poor polyester factories have delayed to restart time, short-term PTA direct demand is inhibited. Due to the impact of this event, the market is pessimistic about the starting rate of terminal looms, and polyester manufacturers have delayed the restart. The polyester load on January 23 was 72.88%, and there was little change during the Spring Festival. However, it is expected that this year's Polyester low load operation time will be longer than that of previous years, which is bad for PTA in the short term.

Inventory side: PTA accumulation degree will exceed the expectation in case of contradiction between supply and demand exceeding the expectation. As of January 17, PTA's social inventory was 1554000 tons, and the inventory level continued to rise, which was in line with our expectation that the inventory turning point had appeared before. Due to the automation and large-scale production of PTA plant, the operating rate of PTA plant is kept around 90% during the Spring Festival, while polyester plant is closer to the downstream textile and weaving industry, and the operating rate of the plant is kept at a low level of 72% - 75%. On the one hand, PTA supply continues to increase; on the other hand, the demand for downstream polyester continues to be low, and under the mismatch of supply and demand, PTA will be rapidly accumulated during the Spring Festival, and affected by this public health emergency, the demand recovery will be delayed, and PTA accumulation will exceed expectations. 

Based on the PTA industry chain, from the perspective of PTA cost end, supply end, demand end and inventory end, there are some short-term disadvantages in every link of PTA industry chain, which are mainly reflected in the following two aspects: first, international crude oil drives PX price to weaken significantly, PTA cost end lacks support; second, supply and demand mismatch , PTA or unexpected accumulation. It is expected that PTA will continue to decline after the festival. It is suggested to maintain the idea of selling at high prices. The target below is temporarily focused on 4600 CNY/ton. In terms of PTA option operation, the PTA volatility will rise sharply under the influence of sentiment in the short term. However, as the market digests the pessimistic sentiment, the PTA volatility will return to normal. In terms of operation, it is recommended to sell ta05c4650 and ta05p4550 of other positions at the same time in case of high short-term volatility.