Market Structure Changes Lead To High Profit In PTA Production
Last week, domestic PTA
futures
The sharp decline, the main 1009 contract fell below the 7000 yuan / ton integer pass, the cumulative decline of 4.22%, for the first time since May this year, the biggest weekly decline.
This week, driven by the rise in domestic stock market, the PTA price rebounded, especially on Thursday. The main contract returned to 7100 yuan / ton, but the weak pattern in the medium and long term remained unchanged.
At present, there are two main reasons why the market is short of market outlook: first, the profit level of PTA production enterprises is high; secondly, the high rate of opening up and weak demand result in serious market surplus.
I believe that PTA production profit to maintain a high level is a normal phenomenon, stock pressure will ease with the rise in polyester demand, for the future market trend should not be too empty.
PTA production has maintained a high profit for a long period of time, which makes the installation rate of the production plant maintained at above 80% level. The supply of the market is adequate, and the pressure on the stock market is increasing, which makes the price pressure. This is the important reason for the weak performance of the PTA price in the near future.
China since 2003
Imported
The ratio of PTA average price to PX average price
As the main raw material of polyester, the production of PTA is generated by the reaction of PX and acetic acid. The proportion of acetic acid as catalyst is very small. The production cost of PTA is mainly determined by the price of upstream PX, and its price trend is significantly affected by the fluctuation of PX price, but the price trend of both ends is not completely synchronous.
In theory, the production of 1 tons of PTA needs to consume 0.639 tons of PX, and the consumption of PX in the actual production process is about 0.66 tons.
In addition to the PX cost, other processing costs are about 1200 yuan, and relatively fixed, so the production profit of PTA depends mainly on the price difference between PTA price and raw material PX purchase cost.
The ratio of PTA price to PX price can well reflect the change of profits of PTA production enterprises.
The picture shows our country since 2003.
Imported
PTA and import PX monthly average price and its trend of parity.
As can be seen from the above chart, the price fluctuation of PX after 2005 is more intense than that of PTA. This is mainly due to the rapid expansion of domestic PTA capacity, and the decline of PTA's external dependence, while some PTA manufacturers still rely on imported PX and lack market pricing power.
Although the price trend of PTA and PX shows a high degree of correlation, the price difference between them is not fixed.
The above figure shows that the ratio between 2003 and 2007 showed a significant downward trend, from the top 1.1 to 0.76, which showed an obvious upward trend after the financial crisis and gradually returned to over 0.9.
The changes in the price of PTA and PX reflect the profit changes of PTA production enterprises.
Before 2007, the expansion of domestic PTA capacity exceeded the pace of PX capacity growth, the impact on PX prices declined, and the profit margins were compressed. In recent years, PX production capacity was gradually overloaded, and the impact of PTA production enterprises on PX prices increased, and profit margins began to expand.
Since the beginning of the year, although the price of PTA has fallen sharply with the price of PX, the profit of PTA has always been between 1000 and 1600 yuan / ton. This high profit is mainly due to the change in the market structure of PTA and PX, which is a normal phenomenon.
The expansion of PX capacity makes PTA producers' ability to control prices more than their upstream PX enterprises and downstream polyester enterprises. This is the fundamental reason why PTA's production profits have remained at a high level for a long time.
Therefore, we can not claim that the price of PTA will drop due to the high profit from PTA production.
Seasonal regulation of demand will relieve stock pressure
Although the high profit of PTA is caused by changes in the market structure, this high profit objectively exacerbates the pressure of market inventory.
As of July 22nd, the number of registered warehouse receipts for PTA on the Zhengzhou Mercantile Exchange was 37403, with an effective forecast of 2152, representing a total turnover of 197 thousand and 800 tons.
The stock exchange has declined relative to the May high of 223 thousand and 900 tons, which is not very high relative to the domestic consumption of around 1 million 400 thousand tons per month.
However, due to the exchange delivery system, the standard warehouse receipts registered before the twelfth trading days in September must be cancelled before the fifteenth trading day of the month. The high inventory will still have a strong effect on the futures price.
How long will the high inventory keep the price down? I think the seasonal rule of consumption will help to relieve the pressure of inventory.
Through the analysis of historical data, the peak season of textile and clothing consumption is concentrated around December. The peak season of polyester fiber consumption is 2 to 3 months earlier than that of textile and clothing, mainly in 9 to November, and the peak season for consumption of PTA as the main raw material for polyester is more than one month ahead.
3, April and 8 and September each year are the peak of domestic PTA consumption, with large imports and high prices. The subsequent May and October are usually the worst performing periods, and import prices are falling.
According to historical rules, the demand for PTA will be gradually reflected in the autumn and winter clothing consumption season. As long as the price of polyester continues to be strong, the price of PTA will decline again.
In September, warehouse receipts must be centralized to write off the suppression of futures markets. It is obvious that futures contracts in September will not show strong performance until there is no fundamental improvement in downstream demand.
However, with the coming of the peak season of consumption, the risk of PTA futures prices plunging again has been greatly reduced.
Judging from the difference between the 1101 contract and the 1009 contract, it has been maintained at 260 yuan in recent months, and the trend has expanded in recent days. The latter 1101 contract will be stronger than the 1009 contract, and the price difference will not be extended to the vicinity of 400 yuan.
Based on the above analysis, domestic PTA production high profit and high inventory can not become the reason for the support price to continue to fall sharply. For the future market trend, it should not be overly bearish. The bottom stage of the price period has already appeared. It is estimated that the 1101 contract will be stronger than the 1009 contract.
For the downstream polyester enterprises, we should consider buying in appropriate quantities.
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