PTA Cost Support Gradually Stronger Bad Time Has Passed

OPEC's monthly report shows that

It will continue to narrow in the second half of the year until the end of the year.

While the OPEC oil conference, which ended in June 2nd, did not achieve substantive results, but OPEC expressed an optimistic attitude towards oil market. The statement stressed that the international oil market is becoming more balanced, and oil prices have been out of a bad time.

OPEC is optimistic about the optimism of oil prices, because demand for crude oil is still growing rapidly.

According to China Customs data, China imported 32 million 240 thousand tons of crude oil in May, an increase of nearly 40% over the same period last year, the biggest increase since February 2010.

In July last year, China issued a crude oil import license to independent refiners in order to stimulate competition in the oil market. Since then, the teapot refinery has become a major force in China's overall import of crude oil.

China's crude oil imports will remain high in the second half of this year as new demand and new infrastructure start up.

As the fastest growing developing country in the world, India's demand for crude oil is very strong.

In March, oil demand in India increased by 16.4% over the same period last year, the largest increase in ten years.

In 2016, India is expected to replace Japan as the third largest consumer of crude oil after the US and China.

With the advent of summer, the world has entered the peak season of crude oil consumption, and 6 to September is also the peak period for global refinery operation, which helps the refineries to digest inventory.

Global growth in demand for crude oil will support the rise in oil prices.

As PTA prices continue to slide,

The losses of enterprises are also gradually expanding.

Our country

Most of the consumption is imported PX, and at present, PX price is 825 US dollars / ton CFR near China, the conversion cost of PTA is up to 4763 yuan / ton, PTA producer has already been in a state of deficit.

Because of the limited oil price adjustment, the possibility that the PX price of PTA upstream products will continue to fall sharply is very small. In the case of higher PTA production cost, it will have a strong supporting role in price.

Under normal circumstances, oil prices and PTA are positively related. The trend of fluctuation is generally the same. However, there is a big divergence between PTA price and crude oil, and the price of PTA also has a return to normal demand.

In the case of strong oil prices, PTA is expected to get cost support and follow the trend of oil price growth.

According to the latest data, the total capacity of PTA downstream polyester is up to 47 million 590 thousand tons / year, and the operating rate is at 80.54%. Compared with the same period in the past year, this is an average operating rate.

PTA production capacity in 49 million tons / year up and down, the current operating rate dropped to 63.69%, has begun to gradually reduce.

Even if the production rate is continued at present, the supply and demand of PTA has begun to balance.

Moreover, with the arrival of the off-season of the industrial chain, although PTA and polyester are hard to maintain the current operating rate, and from the past situation, the PTA's operating rate will decline more seriously than that of polyester. At that time, the supply and demand of PTA will not rule out the possibility of tightening.

In addition, the office of housing and urban rural development of Zhejiang Province issued the "G20 summit construction system environmental quality assurance work plan" in May 11th, making clear that the downtime is from August 26th to September 6th, and at the same time delimit the scope of work stoppage, involving PTA and polyester production capacity of 10 million 850 thousand tons and 18 million 510 thousand tons respectively.

On the face of it, although the reduction of supply is less than the demand reduction, polyester manufacturers will be scheduled to concentrate in 6 to July, and the demand will be released in advance, which will be good for PTA.

With the UK's referendum coming to an end, oil prices are expected to regain the momentum when oil markets are becoming more balanced. This will bring cost support to PTA. At the same time, with the tight supply, the price of PTA is expected to move upward.