Last weekend, if asked about their judgment on the trend of PTA this week, most people were bearish.

But the market is ever-changing. When most people were bearish on PTA, it actually rose!

On May 27, the closing price of the main 1909 contract of PTA futures was 5436 points, an increase of 120 points or 2.26% from the previous trading day.

Why does this happen?

PX prices rarely rebounded

With the launch of Hengli’s 20 million tons refining and chemical integration project in mid-March Chemical equipment successfully produced PX, the supply and demand relationship of PX-PTA in the market was completely reversed, and the price of PX dropped again and again. This is also the most direct reason why PTA processing fees have remained high in the past two months.

On the night of last Thursday (May 23), international oil prices plummeted 5%, and the polyester industry chain almost fell across the board. But the magic is that PX, which was originally in a weak position, actually fell. Bucking the trend, PX’s external quotation rose from US$838/ton to US$849/ton, an increase of US$11 in a single day.

PX’s rare rise last Friday was transmitted to PTA this week, becoming a reason for PTA’s rise.

Polyester production and sales improved, stopped falling and rebounded

Since the second half of last year, polyester factories have been troubled by polyester inventory problems.

Even though the production capacity of polyester companies is mostly concentrated in the hands of leading companies, which have a strong say in prices, they are suppressed by high inventories and profits have not been able to increase.

Since April, affected by the sluggish terminal weaving market, the production and sales of polyester filament have been at a low level of 50-70% for a long time, and the price has also fallen again and again, with a drop of more than 1,000 yuan. Yuan.

But in the two days last weekend, this situation changed dramatically. During the two days over the weekend, the overall production and sales of polyester yarn in Jiangsu and Zhejiang rebounded significantly, with an average estimate of around 240% on both days, clearing a wave of inventory.

On Monday, the decline in polyester yarns from polyester factories also stabilized, and the prices of some polyester yarns even increased by about 100 yuan/ton.

PTA’s fundamental support remains strong

In addition, PTA’s fundamentals remain strong.

According to statistics, in 2017, the domestic PTA production capacity was approximately 50.9 million tons, while in 2018, the new PTA production capacity was only 1 million tons, and the nominal new production capacity in 2019 It was 6.5 million tons in 2020 and 13.2 million tons in 2020.

As can be seen from the above figure, the overall tight supply and demand environment for PTA will not change before 2020 , the fundamentals will always maintain a very strong support.

In this case, why did most people and institutions last week have bearish predictions for PTA?

Polyester maintenance, supply and demand reverse slightly

The fourth week of May (5.20–5.24) , as PTA pre-maintenance equipment has been started one after another, multiple sets of polyester equipment have begun to reduce production, and the supply and demand relationship between PTA and polyester has been slightly reversed in the short term.

As mentioned before, PTA and polyester are inherently in a state of “tight balance”, and any slight disturbance will change the state between them.

Although the short-term changes in installation start-up are not significant, they have had a relatively large impact on the support of PTA’s fundamentals.

Oil prices collapse, the future is unpredictable

In addition, another factor that predicted PTA was bearish at that time was the sharp drop in oil prices in a short period of time.

According to past experience, such large fluctuations in international oil prices in a short period of time will have a chain reaction on the polyester industry chain. Even if the real impact is small, under the capital’s hype, it will basically affect the price trend of the product.

On Thursday evening, Beijing time, U.S. WTI crude oil fell by more than 6%, Brent crude oil fell by more than 5%, and domestic crude oil futures also fell by 7%, touching Limit down.

After such a big drop occurs, investors’ confidence often suffers a very serious blow, and forecasts are generally bearish.

Terminal weaving is in a slump and will be difficult to recover in a short time

In the first half of this year, the entire weaving market has been in decline. “The sound enveloped. Compared with the past few years, the off-season has arrived more than half a month earlier.

Coupled with the rise of loom production capacity in peripheral areas, the supply of conventional products in the market exceeds demand. Weaving companies have serious inventory backlogs. The price of gray fabrics has fallen again and again, and the start of looms hasRates are also trending lower.

June is about to enter, which is the traditional off-season for the textile market. The market is expected to weaken further, and the inventory of conventional products is bound to further accumulate.

The prosperity of the textile market is difficult to improve in a short period of time. Weaving companies do not have a strong desire to purchase raw materials in large quantities for a long time, and they are less willing to withstand rising raw material prices.

Looking at it this way, is there anything wrong with being short on PTA? There’s nothing wrong with it at all.

The market is ever-changing, and there will always be some unexpected things happening.

However, the author insists that the rise in PTA is only due to the short-term benefits brought by polyester production and sales. However, the terminal weaving market is so weak now, and polyester production and sales cannot always be so high. Well, once polyester production and sales fall to the previous level of 50-70%, PTA’s momentum will decline again. </p