PTA Should Arrange Long-Term Air Bill

At present, the production capacity of PTA is less affected by the epidemic situation, and the total production capacity has reached 52.23 million tons. However, the production capacity of downstream polyester has been delayed, and the situation of terminal orders is not optimistic, and the supply and demand are weak. The accumulation of PTA in the second half of the year is still the main keynote.

In the short term, the PTA period spot up and down drive are limited, the overall situation presents a dilemma. The trend of PTA in July was mainly affected by macro policies, public health events, PTA production units and downstream polyester production and sales, with an oscillation range of 3450-3700 yuan / ton. In the second half of the year, it is difficult for downstream polyester to improve greatly, and PTA high storage pressure is difficult to solve, and poor processing is still at a high level. Therefore, we believe that PTA will face greater downward pressure in the future, and it is appropriate to lay out long-term empty orders.

PX inventory pressure still exists, absolute price rise is limited

We believe that in August, the crude oil market is intertwined with both sides, and it is difficult to rise or fall sharply. However, considering the policy of economic stimulus, the crude oil price is expected to rise slightly in August. At present, there are 2.6 million tons of PX production capacity in China, and some units in South Korea and India have not been restarted. At present, PTA in the downstream is still at a high startup rate, which forms an obvious support for PX consumption, and the PX processing poor is at a low level. The small upward trend of upstream crude oil price has obvious support for PX cost. Considering the market's concern about PTA high inventory pressure, and PX's own inventory pressure still exists, the market is not emotional enough. It is estimated that the processing difference of PX is still low in the future, and there is a small upward expectation for PX, but the range is limited.

PTA accumulation reaches a new high and processing pressure increases

From the point of view of PTA supply side, PTA operating rate is high, social inventory increased from 3.54 million tons at the beginning of July to 3.8 million tons at the end of July, maintaining the accumulation status.

At present, PTA processing is still at the level of 600 yuan / ton, which is a higher level acceptable to PTA plants. Many PTA plants still maintain high startup load. However, at present, the PTA social inventory has been close to the level of 4 million tons. In August, it is difficult to solve the problem of accumulated stock, and it is expected that the high processing gap will be difficult to continue. We believe that PTA processing error will continue to narrow in August.

Polyester inventory pressure accumulated, cash flow pressure increased

At present, under the impact of the new crown pneumonia epidemic, the consumption of non-woven fabrics, which are also polyester products, has increased significantly due to the need for epidemic prevention, and the consumption of bottle pieces has also increased significantly. However, the sharp decrease of family income and the implementation of home isolation have an obvious impact on textile and clothing. At present, due to the sharp decrease in spring clothing sales, clothing brands greatly reduce autumn orders to achieve the consumption of spring inventory. Although the European and American economies restart and the domestic economic cycle strengthens, the consumption of textile and clothing products continues to rise, but the year-on-year data is still poor. It will take time for the terminal consumption to improve. Therefore, under the weak actual demand and the suppression of speculative inventory in the first half of the year, the overall inventory pressure is relatively large.

Among polyester products, filament is the most affected by the epidemic. At the same time, filament is the largest type of production, with a cumulative capacity of 3.18 million tons after 2019. Although polyester production continued to recover after the epidemic, the filament production was still declining year on year. In the second half of this year, 1.65 million tons of filament production capacity will still be put into operation. Although the production of many polyester plants has been delayed due to the impact of the epidemic, it will not be absent. With the commissioning of Baihong plant, Hengli and other units are also under planning. In the future, the supply pressure of polyester end will increase sharply, and small and medium-sized enterprises will face the risk of capacity clearing. In the short term, most polyester shutdown enterprises have not determined the restart time. Considering the current profit level, the restart expectation is not strong. It is estimated that polyester production will be maintained at 87% - 88%.

We believe that the current PTA production capacity is less affected by the epidemic situation, and the total production capacity has reached 52.23 million tons. However, the production capacity of downstream polyester has been delayed. Moreover, the terminal order situation is not optimistic, and the supply and demand are weak. PTA accumulation in the second half of the year is still the main keynote. At the same time, due to the poor processing of PTA, PTA is expected to face a large amount in the future Downward pressure, short position configuration is the most appropriate.