In April, domestic PTA prices rose quickly. Frequent devices’ faults and increasing downstream sales were the major promoters. But as we all know, the price rose caused by devices’ faults cannot last for a long time. So after entering in May, domestic PTA spot prices began to fall from about 5200 yuan / ton in late April to about the current 5100 yuan / ton. In this regard, Treasure Island analysts Wang Jianxia told International Business Daily that this wave of decline was caused by a number of reasons.
First, price of crude oil will keep fluctuating for the major oil producers still hold the most market share, and $ 60 / barrel is still a strong resistance. However, the crude oil peak-season has arrived, so the long-term trend of crude oil price is still steady up.
Secondly, from a cost point of view, from the end of May to early June, several sets of pre-stop Asian PX device has restarted, and the 1.6 million tons’ PX device of Zhongjin Petrochemical has basically been determined to put into operation officially at the end of June and is expected to produce the products in early July as well. The increasing supply of goods will continue to raise the space inhibition of post-PX. In addition profits of PX will be narrowed, which will reduce the supporting for PTA price.
In addition, from the supply side point of view, after entering in May, PTA devices in maintenance or with faults restarted gradually. Fujian Jialong with 600,000 tons rebooted on 15th; Taihua Ningbo with 1.2 million tons restarted on 11th; the overhaul of Henli with 2,200,000 tons in May is identified to be canceled. Also accompanying delivery of futures 1505 contract, although most sources have leaked into the 1509 contract, but there is still some sources circulation to the spot market. Affected by this, industry stakeholders began to have concerns about the expected increase in supply, market bearish attitude gradually, resulting in spot center of gravity down.
Finally, from the demand point of view, in April downstream demand soared due t the rising raw material price. While in May, the high stock pulled down the downstream sales and production of polyester. Wangjian Xia said that the current downstream polyester POY inventory increased compared with the beginning of most 5 days to 12 to 18 days; FDY stock rose three to four days to eight to 20 days; DTY inventory is relatively little change compared with the beginning of May rose 2 days about 17 to 21 days. According to the price changes, the downstream polyester products have appeared in a different room for downward adjustment. In addition, after entering in June, the market will enter the traditional off-season, and the polyester operating rates may reduce as the arrival of the off-season and pull down the PTA price.
As to the market outlook, Wangjian Xia said the recent domestic PTA market may rebound in a weak environment and prices are expected to fall mainly. After entering in June, the market should pay close attention to PX, PTA device operation and the downstream polyester purchasing.
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