PTA Short Term Further Callback Risk

In May, although the polyester level of the downstream polyester plant remained at the peak level during the peak season, the overall supply volume of the spot market increased because of the restart of the maintenance plant in the PTA plant.

At the same time, the overall decline of domestic commodity futures also dragged down the PTA price callback. As of May 30th, the PTA main 1609 contract reached 9.34% within the month.

I believe that under the expected slowdown in polyester consumption, PTA supply is expected to enter a neutral loose pattern, and

Prices will weaken, and there will be a further risk of PTA callbacks in the near future.

From the operation of the plant, some of the devices in May were restarted after short stop and scheduled maintenance.

As of May 27th, the total load of PTA plant in China was 74.3%, which still maintained a high level in the year.

The author understands that in June, the BP110 10000 ton PTA plant in Zhuhai was planned to restart. The 75 thousand tons of Urumqi petrochemical and 700 thousand tons of Hon Bang Petrochemical Company may arrange for overhaul. The PTA market is expected to maintain a high starting pace. Unless the PTA device fails or fails, the supply of spot market will be more abundant.

The above factors superimpose PX price and make it strong.

Processing profit has declined significantly in the earlier stage, and some factories have once again turned into a deficit.

The author believes that PTA factories may have a dilemma in protecting cash flow and operating rate.

From a seasonal perspective, the downstream and terminal markets will enter the tradition.

This year, due to the early polyester price increase and the main production area printing and dyeing enterprises production capacity compression, the terminal loom and weaving industry started earlier than before.

It is understood that from early April to late May, the operating rate of Jiangsu and Zhejiang looms has dropped by nearly 10%.

At present, the operation of downstream polyester enterprises is relatively stable, and the overall start-up load is maintained at over 80%, maintaining the level of commencement of the peak season. There is also a certain support for the consumption of raw material PTA.

The author believes that, with the decline of terminal operating rate, the weakening effect of market demand will be further pmitted to the polyester end, and from the recent profit of polyester processing, the profit margins of the main varieties will all be compressed.

Recently, the focus of crude oil is still on the increase of supply side uncertainty. The Canadian fire impact is gradually subsiding, and the post disaster workers' post duty is observed later.

In addition, we need to continue to pay attention to the decline of crude oil production in Nigeria, Libya and the United States, as well as the crude oil production increase in Saudi Arabia, Kuwait and Iran.

Overall, the pattern of excess supply of crude oil has not changed in the medium term, and oil price is facing a key pressure level of 50 US dollars / barrel, making the expectation of the callback of the crude oil market back up, thus affecting the weakening of PX prices.

From 4 to May, several sets of PX devices in Asia were overhauled.

Judging from the PX contract negotiations in Asia, there was no agreement in May, indicating that the acceptance rate of the downstream PTA factories to PX was high.

It is understood that the June PX contract quotes have been introduced.

Among them, Japan's offer of light was quoted at 820 US dollars / ton, Japan's JX quoted 840 US dollars / ton, Korea S Oil and Korea SK both quoted 830 US dollars / ton, ExxonMobil has not yet quoted price, the quoted price is reduced by 20 to 30 US dollars / ton compared with May.

The author believes that after the end of intensive maintenance period, the tight supply pattern of PX market is expected to improve.