Start up load rise or stifle PTA rebound

wallpapers Industry 2020-12-09

was affected by the rebound of crude oil price and the easing of funds, PTA price rose sharply in March, successfully breaking through the upper edge of the previous decline channel. In the future, with the rise of PTA production enterprises' operating load, PTA rising momentum will gradually fade. The

and

oil prices may return to below $40 / barrel. The main reason why the international crude oil prices of

and

have stopped falling and rebounded is the agreement on freezing production between OPEC and Russia. Although the crude oil production of OPEC and Russia reached its peak in January, the freezing of production did not have much effect on easing the oversupply. However, OPEC and Russia began to cooperate on the issue of oil price. On the one hand, it shows that both sides intend to stabilize the oil price, on the other hand, it also shows that the resistance of oil producing countries to low oil prices has reached its limit, which has sent a positive signal to the market.

however, the western oil embargo on Iran has just ended, which makes Iran join the production freeze agreement is tantamount to continuing to implement oil embargo sanctions against Iran. Therefore, the inconsistency of interests determines that the production freeze agreement can not become a turning point to change the trend of crude oil. The rise of crude oil is largely due to the impact of the agreement on the market psychology.

and

originally planned to hold a frozen production meeting on March 20 may be postponed to April. In addition, Iran said in mid March that it would not consider freezing production until production returned to 4 million barrels a day, while Russia said it understood and supported it. The monthly report of OPEC 3 lowered the global crude oil demand forecast for the whole year to 31.5 million barrels / day, a decrease of 100000 barrels / day from last month's expectation, and an increase of 1.8 million barrels / day compared with 2015. This greatly reduces the market's expectation for the alleviation of excess supply in the later period. Crude oil may return to below $40 / barrel, and the cost center of PTA may move down.

and

PTA industry operating load increased.

depending on the size of the enterprise, PTA enterprises processing costs between 400-1200 yuan / ton. In this way, the cost of PTA / 400 tons can be better reflected by the larger production cost of PTA.

and

, we find that the operating load and industry profit of PTA enterprises present a relatively good negative correlation situation. When the profit is high, the operating load is often low; when the loss is large, the operating load is always at the peak. In fact, at present, PTA industry is falling into such a cycle: due to the overall overcapacity of PTA Industry and sufficient market supply, with the rise of PTA price and the improvement of enterprises' operating conditions, the enterprises which stopped production in the early stage will start operation one after another. However, with the rise of enterprise operating load, the supply pressure gradually increases, PTA price will fall again, and the enterprise's operating conditions will worsen, thus starting to limit production and protect price again. Due to the sharp rise of PTA price, the operation of PTA production enterprises has been significantly improved. Therefore, the operating load of PTA production enterprises has been significantly increased in recent years, reaching 73.8% as of March 22, and only 60% - 65% from January to February. Therefore, we have reason to believe that with the increasing supply, PTA prices will be suppressed. In addition, crude oil may weaken in the later stage, which will further reduce the production cost of PTA.

and

to sum up, affected by Iran's non accession to the production freeze agreement and OPEC's downward demand expectations, crude oil prices may weaken in the later period, which will suppress PTA prices. In addition, considering the current high operating load and the expectation of cost reduction, under the combined effect of supply pressure and cost collapse, the PTA price is more likely to weaken in the later stage.