uncharted4crashingpc| Fundamental contradictions are not prominent, PTA continues to fluctuate

Futures daily

AprilUncharted4crashingpcThe shock of polyester raw material is the main. Cost-side OPEC+ production reduction and geopolitical tensions support the strong operation of crude oil. Crude oil is strong, while PX is suppressed by the supply and demand side, so that the cost drive to PTA is not strong, and the supply and demand side of PTA is in a destorming pattern, there is some support; ethylene glycol mainly revolves around import rebound and low valuation game in April, import rebound suppresses ethylene glycol, while low valuation stroke must support, ethylene glycol concussion is the main.

Spot, PTA, PTA spot center of gravity shock, crude oil is strong, PX is weak, PTA spot drive is limited, supply-side device disturbance is more, polyester load is at a high level, PTA is in the pattern of destocking, there is a certain support for spot, basis and monthly differences are stronger.

In terms of ethylene glycol, the spot price of ethylene glycol is mainly fluctuating, the domestic equipment at the supply side is overhauled more, and the load of the plant is declining, but the import picks up, the disturbance of overseas supply is further eased, the port inventory picks up somewhat, the spot price of ethylene glycol is suppressed, while the crude oil is on the strong side, and the low valuation of ethylene glycol brings some support. Under the accumulation of the port, the difference of ethylene glycol decreased.

PTA output dropped month-on-month.

The output fell down with more plant disturbances in April, and there were still many plant maintenance plans in May, so it is difficult to increase the output. In April, domestic monthly PTA output was 5.66 million tons, down 4 per cent from the previous month and up 10 per cent from a year earlier. The output of PTA decreased in April compared with the previous month, and the main equipment was overhauled. At one point, the device load fell below 70%. In April, the average load of the plant was 74%, which was 6% lower than the previous month. Looking forward to April, although part of the previous maintenance equipment restart, Taiwan Chemical 1.5 million tons and Yizheng chemical fiber 3 million tons new capacity plant load increase, but there are still many plant maintenance plans. Jiaxing Petrochemical 2.2 million tons, Honggang Petrochemical 2.5 million tons and Weilian Chemical 2.5 million tons have been overhauled, Hengli Petrochemical (Dalian) Phase 1 2.2 million tons and Yisheng new materials 3.6 million tons have maintenance plans, it is expected that it is difficult to increase PTA production in May.

Chart 1:PTA plant load and monthly output

Decline in output of centralized maintenance of ethylene glycol plant

The ethylene glycol plant was centrally overhauled in April, and the output declined. It is expected that the unit will restart in May, and the supply may pick up. According to Zhuochuang statistics, the production of ethylene glycol is expected to be 142 in April.Uncharted4crashingpc.640000 tons, down 10% from the previous month and an increase of 15% over the same period last year. The output of ethylene glycol decreased significantly in April, which was mainly affected by the centralized maintenance of the plant. The average load of the plant in April was 61%, which was 5% lower than the previous month. In April, the plant changes were mainly parking maintenance of Zhejiang Petrochemical, Satellite, Qianxi and Zhongkun, restart of Fude, Shouyang, Haoyuan, Guanghui and Shaanxi Coal Yulin, and small load adjustment of Hainan, Wuhan, Tongliao, Tianye and other units. Looking forward to May, the early maintenance equipment is expected to restart, Yulin Chemical has been restarted, and the domestic supply is expected to pick up in May.

Polyester load high polyester output is high

Polyester production rebounded seasonally in April, and polyester production is expected to be high in April. The polyester output in April was about 6.28 million tons, an increase of 1.78% from the previous month and 8.8% over the same period last year. In April, the average polyester load was 92%, the polyester load was high, and the polyester output was high. Polyester cash flow differentiation. In April, polyester cash flow continued to differentiate, while filament cash flow was OK. From the inventory point of view, as of April 25, polyester inventory has rebounded, filament enterprise inventory 30.4 days, an increase of 4.2 days over the end of March; slicing enterprise inventory 18.2 days, an increase of 0.7 days over the end of March; staple fiber enterprise inventory 12.4 days, an increase of 0.3 days. Polyester enterprise inventory is not good, polyester cash flow repair is limited, shock differentiation.

The start-up of looms in Jiangsu and Zhejiang has not changed much in April and is expected to be high in May. As of April 25, the construction of Jiangsu and Zhejiang looms has dropped slightly to 79%, with little overall change. It is expected that the start of Jiangsu and Zhejiang looms will be at a high level in May.

To sum up, the polyester load and the start-up of Jiangsu and Zhejiang looms are at a high level in April, and the demand is OK. In May, the polyester load is expected to drop somewhat, but the range is moderate, and the demand is expected to maintain a certain degree of prosperity.

Import and export analysis

In terms of import and export data, the export volume of PTA in March 2024 is 457200 tons, and in April 2024 is expected to be 350000 tons. In March, the export volume of PTA exceeded expectations and reached a new high. However, overseas polyester factories completed replenishment in March, exports fell in April, and the overall export volume remained at a high level.

PTA machining differential pressure

PTA processing poor shock repair. Although the crude oil is in a high position, PXN is under pressure, PX is weak, and in April PTA is out of storage, PTA processing poor shock repair, PX profit, it is expected that PTA processing is poor.

PTA continues to go to the library

PTA goes to the library in April and may continue to go to the library in May, which slows down somewhat. According to Zhuang Chuang statistics, as of April 26, 2024, PTA social inventory is 4.154 million tons, which is 404000 tons lower than the end of March 2024. The output of PTA declined in April, the output of polyester was high, and the removal of PTA was relatively large. In May, the disturbance of the plant was still more, and the output was still rising, but the load of polyester or pressure, PTA or continued to go to the warehouse, but the efforts to remove the warehouse slowed down.

Chart 2:PTA Social inventory

Outlook for the future

According to the above analysis, on the supply side of PTA, the PTA device was centrally overhauled in April, the device load decreased and the supply shrank. There were still many overhauling and planned overhauling devices in May, and the supply pressure was still low under centralized maintenance.

On the supply side of ethylene glycol, there were more centralized maintenance of the plant in April, the plant load decreased, and the output declined. In May, the maintenance device was expected to restart, the device load was expected to pick up, the superimposed overseas disturbance weakened, the import rebounded, and the ethylene glycol supply rebounded.

In terms of demand, the polyester load and the start-up of Jiangsu and Zhejiang looms are at a high level in April, and the polyester performance is relatively high. In May, the polyester load may fall somewhat, but the extent of the decline may be more moderate.

Generally speaking, from a cost point of view, the situation in the Middle East has eased, the support of geopolitical premium has weakened, and the high level of crude oil has fallen back. However, under the background of OPEC+ production reduction and the approaching peak season of traditional demand for refined oil in the United States, there is still some support under crude oil, but PX destorming efforts are slow and PX drivers are not strong. PTA, from the crude oil point of view, there is a certain support for crude oil, but the PX driver is not strong, the cost of PTA storage support, but the driver is not strong, May plant maintenance is still more, polyester negative reduction is mild, May is still the depot pattern, under the PTA storage support. In terms of ethylene glycol, the cost side, crude oil storage support, coal prices may also stabilize, undervalued ethylene glycol storage support, domestic supply is expected to pick up, and the disturbance of overseas devices is weakened, as well as polyester load pressure, supply and demand side pressure, ethylene glycol is expected to fluctuate around valuation and supply and demand side games.

(article source: futures Daily)