ACP Negotiations Broke Down PTA Cost Support Weakened

　　 cost Support weakening

Since the eastern port of Libya is about to resume operation and the US commercial crude oil inventories are at a historic high level, the crude oil prices in the two places have been rising since late April, and the price of petrochemical aromatics has declined. As of May 4th, CFR China PX4 has fallen by 67 US dollars / ton since the month, to 1178 US dollars / ton, equivalent to PTA cost of 6500 yuan / ton.

Although since mid March, the PX production in Asia has been reduced, and the domestic PX load has dropped to 65%. However, due to the centralized maintenance of PTA enterprises and the shrinking demand, PX inventory has maintained a relatively high level. Late PX supply pressure will also intensify. New products of Pengzhou Petrochemical 650 thousand ton plant have entered the market, Jurong aromatics 800 thousand tons and India OMPL92 million tons new installations are scheduled for commissioning in May, and in the three quarter Korea and Japan also have about 3 million 300 thousand tons of new installations put into operation.

The PTA device restarted and the load increased. However, the enthusiasm of PTA enterprises to purchase PX is still not high. In May, the ACP negotiations broke down again, PX prices will remain weak, and the PTA cost line may continue to move downward.

　　 polyester High yield is unsustainable

3 in the middle of the month, the PX - PTA link reduced production, and the market confidence was boosted. In addition, the downstream was in the traditional stocking season, and the average production and sales of Jiangsu and Zhejiang polyester exceeded 100. The cash flow of polyester plant began to turn positive at the end of March, and realized a month's continuous profit. The polyester load increased from 58.5% at the end of March to 82.5%. However, in late April, terminal procurement was drawing to a close. The load of Jiangsu and Zhejiang looms has dropped to 72%, and polyester production and sales have dropped significantly.

In addition, following the commissioning of 450 thousand tons of new polyester plant in April, 400 thousand tons of new capacity were put into operation this month. In the context of the end demand, supply will undoubtedly threaten the fragile pet business. Once polyester production and sales fall, profit margins will be compressed, and the current start-up load will be difficult to sustain.

　　 PTA Stocks began to pick up

In April, a number of PTA units were restarted, involving a total capacity of 10 million 400 thousand tons. At the same time, 1 million 500 thousand tons of Xiang Lu petrochemical and 2 million 200 thousand tons of Yisheng Ningbo have been put into operation successfully. The author estimates roughly that the output of PTA has increased by nearly 800 thousand tons compared with the end of March. At present, the domestic PTA composite load has increased to 82.5%, and social inventory has bottomed out. In addition, Honggang Petrochemical 1 million 500 thousand tons and Xiang Lu another set of 1 million 500 thousand tons PTA new plant started commissioning this month. At present, the procurement of textile raw materials has come to an end in the summer. If the PTA load is maintained at present level, the PTA social inventory will gradually accumulate in the later stage.

　　 Obvious signs of long withdrawal

As of April 30th, the top 20 seats in the PTA1405 contract fell from 38 thousand to 250 thousand at the end of February. Take COFCO futures seat as an example, its 1405 contract long position reached the peak of 61979 hands in late February, and then continued to sharply reduce its position. At present, there are only 5946 hands left. The withdrawal of many bulls reflects to some extent that the market has a bearish expectation of the market.

On the whole, the downstream consumption is turning pale, while the supply of PX PTA has been increasing, and the industrial chain stock has started to accumulate. The PTA price price still has downwards space, and the target can be seen to 6000 yuan / ton line.