Intention of downstream production cuts, short-term suppression of PTA

On Thursday, PTA fell slightly after opening higher, maintaining a volatile sideways pattern during the day. The main force 1205 opened at 9060, the highest intraday 9080, the lowest 9044, closed at 9066 late in the day, compared with the average daily price rose 8 yuan / ton, the day traded 405,680 hands, positions increased by 50,754 hands to 285,394 hands.

Upstream market:

WTI rose 1.46 to 106.16, Brent crude oil rose 2.14 to 124.12 US dollars / barrel; naphtha rose 1 US dollar to 1058-1070 US dollars / ton CFR Japan; heterogeneous MX fell 5 US dollars to 1408-1409 US dollars / ton FOB Korea; Asia PX fell 15 US dollars to 1640-1641 US dollars / tonne FOB Korea and 1665-1666 US dollars / tonne CFR China, Europe fell 15 US dollars to 1555-1557 US dollars / tonne FOB Rotterdam, the United States stable at 1605-1615 US dollars / tonne FOB US Gulf.

Downstream market:

On Thursday, some factories in Jiangsu and Zhejiang have lowered their bids by as much as one to 400, and other factories have extended their preferential policies. Up to now, the average production and sales volume of polyester plants have been 7-9 percent, and the rigid demand for downstream products has recovered moderately but it is still slow. Due to pressure from inventory, it is not possible to exclude individual plants from lower prices in the near future. However, as a whole, polyester yarns are currently adjusted, and most of the prices are maintained. In the vicinity of the profit and loss line of polyester plants, sales are sluggish, and production intentions have increased.

Comprehensive review:

The overnight market's worries about the euro area have eased and crude oil has closed higher, but PX has weakened. However, with the current PX price conversion, PTA processing is still a loss, so the cost support is still strong, in addition to the high volatility of crude oil will also form a psychological support, the overall look at the strong upward trend has a significant supporting role for PTA. According to a recent research report, the production capacity of PX's new production capacity may start gradually after September. Prior to this, there was no new PX production capacity in China. Therefore, it is expected that PX will continue to maintain its strong trend. The demand side in the near future has still not seen any significant improvement. Despite the increase in downstream production and sales last week, the sustainability is not strong. Mainly due to the lack of orders for textile and garment companies, the stocking of raw materials is more cautious, mostly with the use of the main purchase. Therefore, the high inventory of polyester plants and the use of funds have led to a decline in the affordability of downstream companies and there are signs of production cuts. Therefore, the cost is relatively difficult to transmit, putting pressure on PTA prices. In a comprehensive view, the upstream and downstream trends are still different, and the PTA will be dominated by shocks in the short term, and it is still not a condition for continued decline. The current 9000 line is still a strong support, PTA short-term shocks in this, but the medium-term rebound will continue.