High Inventory Low Demand PTA Trend Short Term Adjustment

According to the price monitoring of business associations, the price of domestic PTA spot market has continued to decline since February, and the average market price in February 26th ended at 4381 yuan / ton, down 10.33% from the beginning of the month, down 32.24% from the same period last year.

Up to now, PTA social circulation stock has exceeded 2 million tons, to 2 million 265 thousand tons, 500 thousand tons more than before the festival, has reached 4 years of high inventory. The basic PTA is affected by supply and demand in the short run. Some devices take the initiative to reduce load operation. At present, the overall operating rate has dropped slightly. The current PTA operating rate is about 81%, but the overall operating rate is still high. Next week, Jiangyin Hon bang and Hua Bin Petrochemical have a restart plan, and the inventory remains high and difficult to digest.

In terms of cost, US crude oil inventories continue to increase, and oil products depots are limited. The pressure on downstream polyester factories, especially large factories, is still relatively large. With the outbreak of the epidemic, some factories that have been pre maintenance have been restarted, and the operating rate has risen slightly to around 62%, and there is a possibility of further improvement. The market of polyester filament is better than before. The mainstream factories in Jiangsu and Zhejiang have stable quotations, and the prices of individual factories are increasing. Textile enterprises in all parts of the country began to resume production in an orderly way, and the terminal textile industry rose to 24%. The large and medium sized textile enterprises had a positive desire to return to work, and the rate of return to work was relatively high. However, the cash flow shortage, shortage of epidemic protection supplies, and the return of workers from other places affected and restricted the speed of small enterprises returning to work. At the same time, logistics has not yet fully recovered, scale sales have not really started, the overall demand for release is slow.

At present, the PTA factory is affected by the imbalance between supply and demand, inventory backlog is more serious, high storage pressure is outstanding, short term forced PTA device to reduce load. At the same time, the downstream polyester is facing the problems of workers' location, logistics and high storage, as well as the progress of the recovery of the terminal textile enterprises. Fortunately, the logistics is gradually improving, and the measures to promote the enterprises to actively resume work are also being introduced everywhere. It is estimated that the polyester load in the lower reaches of the March will be significantly improved. Xia Ting, a business analyst, believes that under the background of short term high inventory and low demand, the possibility of PTA's weak adjustment is greater. As demand continues to improve, the market will also improve.