The textile market has entered the off-season

In April this year, there was a rapid and substantial increase in domestic PTA prices, in which the frequency of equipment failures, rising prices, and the improvement of downstream production and sales were the main drivers of this round of higher market prices. However, it is well-known that the rise in prices caused by device accidents is not a decisive factor for the market's long-term foundation for high positions. Therefore, after entering the month of May, the domestic spot price of PTA began to fall, and its price dropped from about 5,200 yuan/ton in late April to about 5,100 yuan/ton in the current period. In response, Treasure Island analyst Wang Jianxia said in an interview with the International Business Daily that this wave of decline is also caused by many reasons.

First of all, in terms of crude oil, the current major oil-producing countries have not substantially reduced their market share. Crude oil prices have been higher in the latter part of the year. In the future, the overall trend may continue to be dominated by concussive consolidation. The US$60/barrel is still a strong one. Resistance level, but given the arrival of demand for crude oil in the peak season, the market is consolidating in the short-term, while the medium-to-long-term is still in a steady trend.

Secondly, from the perspective of cost, from the end of May to the beginning of June, several PX units for early-stage parking in Asia have a restart plan. In addition, 1.6 million tons of PX plants from Zhongjin Petrochemical have basically been confirmed to be put into production by the end of June, and production is expected to begin in early July. Out of products, the increase in supply of goods will inhibit the continued growth of PX in the later period. In addition, PX's profits will also be narrowed, and PTA's support from costs may be reduced.

Moreover, from the perspective of supply, after entering May, several sets of PTA devices that have been overhauled or failing have been successively restarted, including 600,000 tons of Fujian Jialong’s restart on the 15th and Taiwan’s 1.2 million tons of Ningbo’s restart on the 11th. The Hengli 2.2 million tons device, which was originally scheduled to be overhauled in May, has now been cancelled. In addition, with the delivery of **1505 contracts, although most of the sources of goods have already flowed into the 1509 contract, some sources of goods still flow to the spot market. Affected by this, relevant stakeholders in the industry began to worry about the increase in supply expectations, and the market has seen a gradual rise in the status quo, which has led to a drop in spot prices.

Finally, from the demand point of view, due to the sharp rise in the center of gravity of polyester raw materials in April, the downstream polyester factory appeared panic and the goods were actively consulted. After entering May, the downstream mainly consumed the reserve stocks in April, resulting in the production and sales of downstream polyester have been in a relatively light state for some time. Wang Jianxia said that the current downstream polyester POY stocks rose by 5 days from the beginning of the month to 12 to 18 days; FDY stocks rose by 3 to 4 days to 8 to 20 days; DTY inventory relative changes are small, up 2 days from the beginning of May. About 17 to 21 days. From the perspective of price changes, downstream polyester products have seen different downsides. In addition, after entering June, the market will enter the traditional off-season, and summer will gradually usher in issues such as power cuts. By then, the polyester utilization rate may gradually decrease with the arrival of the off-season and power cuts, and the demand side will cause some impact on PTA. drag.

For the trend of the market outlook, Wang Jianxia said that the recent domestic PTA market may be in the relatively weak atmosphere of the callback, the price is expected to fall mainly, but during this period does not rule out the month-end settlement of the market support. After entering the month of June, the market needs to pay close attention to the operation of PX and PTA devices, the procurement of downstream polyester off-season, and the release of short-term sentiment.