Cost And Game Of Supply And Demand

During the National Day holiday, the domestic PTA futures market is in a closed state, the market negotiation atmosphere is light, and the price remains quoted before the festival. The cost side is affected by the strong crude oil, the price of raw material PX has risen significantly, but the PTA fundamentals have not improved significantly, the market price has slightly fluctuated, and there is no significant upward movement.

Market Overview:

During the National Day holiday, people in the industry are basically in the state of vacation and leaving the market, so there is no obvious fluctuation in the domestic PTA market price. The CFR price in Asia is affected by the domestic holiday, and the price remains at the pre Festival level of 430 USD / T. During the holidays, PTA and downstream polyester plants fluctuated in a narrow range, but the supply and demand did not significantly improve and continued to accumulate a small amount.

Supply side: During the holidays, the overall operation of PTA plant in China is relatively stable, only Xinjiang Zhongtai entered the shutdown state on October 3, and it is expected to overhaul for 1-2 months. In addition, Zhuhai bp1.25 million tons of plant resumed operation at the same time, so the market supply fluctuated little. According to Longzhong Statistics (20201002-1008), PTA output was 967300 tons. Generally speaking, PTA Market in the later stage is still expected to be overhauled, but xinfengming phase 2 will be put into operation soon, and the market supply is still at a high level. According to Longzhong statistics, PTA output in October was about 4.2 million tons.

Demand side: As for polyester, only two sets of devices joined the maintenance line, and the others maintained high load operation. Among them, wankai 550000 ton unit was overhauled on October 5, and saisheng 200000 ton unit was overhauled on October 7. According to Longzhong information statistics (20201002-1008), the output is 1076900 tons. Due to the strong rise of crude oil price, polyester sales were booming in the three days before the end of the holiday, and the prices of various polyester products moved up in different ranges, while the terminal orders performed well, supporting the polyester end load to maintain a high level, and the maintenance plan of some enterprises was further delayed. According to Longzhong statistics, the polyester output in October was about 4.8 million tons.

Cost side: Foreign economic stimulus policies and hurricanes affected producers to close offshore drilling platforms. International crude oil performed strongly during the national day. Crude oil prices fluctuated and rose, supporting the prices of PX and naphtha to move up. However, the poor processing of PX was still at a low level. As of October 8, the price difference of px-n was $127.04/t. PX supply and demand contradiction is still relatively prominent, PX processing poor sustained low, short-term good performance is difficult.

Future forecast:

In the short term, the cost side is slightly better, and the overall situation is still mainly volatile; due to the boost of demand side and the small contraction of supply side, the short-term TA supply and demand is still balanced and slightly loose. In addition, Ta is weaker than other products and is mostly used as air distribution varieties, which is not conducive to ta rebound. Therefore, we believe that the short-term TA will still be dominated by shocks, with an operating range of 3250-3450 yuan / ton.