The Overall Supply And Demand Structure Of PTA Is Improving.

In November 2008, the US launched QE, and global commodities began to rise sharply. As a time node, PTA took seven years to get out of a big head and shoulders.

At the beginning of the year, PTA crude futures fell again, and the main 1605 contract closed at 4220 yuan / ton, which has effectively fallen below the lowest level of 4260 yuan / ton.

From the technical analysis point of view, the downward channel of PTA price has been opened, and there is still a lot of room for further decline. We can take the strategy of backing low and short, so that we can achieve broad benefits from small losses.

And from the basic point of view, how does PTA operate?

To find out where the future of PTA futures will follow, first of all, we need to understand the logic of falling prices.

Since 2011, overheated investment has made PTA production capacity increase rapidly. Due to the slowdown in domestic and international economic growth, the downstream demand of the chemical fiber industry has slowed down, and the imbalance between supply and demand in the PTA market has been slowed down.

This is the most fundamental reason why PTA price has changed from prosperity to decline.

The collapse of crude oil prices in the second half of 2014 has accelerated the downward trend of PTA prices.

As for the impact of falling cotton prices on substitutes PTA, it is more often seen as "falling into the trap".

The bankruptcy liquidation of Far East Petrochemical Company, the fourth largest PTA producer in China, can be regarded as the beginning of PTA industry's capacity.

The third largest producer, Xiang Lu petrochemical, has 4 million 500 thousand tons of capacity in Zhangzhou due to the planned acquisition of Sinopec.

Most other small business installations are at a standstill.

In contrast, the new capacity of PTA in 2016 was only 3 million 200 thousand tons, and capacity growth slowed sharply.

It is difficult for the whole industry to operate, and it is difficult to have new capacity input.

It can be considered that

The supply is basically stable, even if there are fluctuations, it will be less.

From the demand side, despite the strong economic performance of the United States, whether the domestic or domestic textile exports to the euro area, the economy continues to slump, which means that the overall demand growth of PTA will continue to slow down.

However, what needs to be emphasized is that the decline in demand and the slowdown in demand growth are two completely different concepts.

The slower growth rate is different from the decline in demand.

In addition, the imbalance between supply and demand caused by shale oil has caused the collapse of crude oil prices. However, the price of crude oil has already been around 30 US dollars / barrel. If we fall below 20 US dollars / barrel and reach shale oil, the shale oil production enterprises will be shut down on a large scale.

At that time, the United States will intervene in order to achieve the goal of self-sufficiency in crude oil, so the price of crude oil should not be too deep to be seen.

In the short term, the PTA enterprise

At 70.31%, it belongs to a high level in the past two years, but as the price goes down, some enterprises begin or plan to stop production.

Ningbo MITSUBISHI 700 thousand tons capacity and Yisheng petrochemical Ningbo 2 million 200 thousand tons capacity before January 15th began to overhaul.

If late PTA prices continue to go down, there will be more PTA enterprises, especially small and medium-sized enterprises, to plan for overhaul, and a new round of production and price protection will also be launched.

Through the above discussion, the author thinks that the peak period of PTA production has passed, and with the development of capacity, the most serious period of oversupply is over.

Constrained by the economic weakness, the slowdown in downstream demand is difficult to change in a short time. But as long as demand does not decline, it means that demand is still increasing. Therefore, from the trend, the overall supply and demand structure of PTA is improving.

In addition, the PTA inventory of downstream polyester enterprises is very low, with an average of only 3 to 4 days, and if the PTA supply falls, polyester enterprises may start replenishment.

Therefore, the PTA price is expected to stand on the platform of 4300 yuan / ton, and the recent operational thinking is mainly based on overshoot and rebound.