Futures daily upstream market structure unchanged

2022-07-03
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Futures: the upstream market structure has not changed. PTA launched a summer offensive

during the 10 day rapid decline of 20% in crude oil (from $72/barrel to $60/barrel), PTA still maintained a steady upward trend, and once again showed its upward trend after 6 weeks of range consolidation. The main factor to boost this upward momentum is still the cost support of the strong naphtha and PX market prices for PTA prices. This support, stimulated by the improvement of downstream demand, prompted the start of a large-scale upward trend of PTA futures

as for the basic analysis ideas of current energy and chemical products, especially PTA, the author still insists on the influence of the absolute amount of cost in supply and the relative amount of profit level of production enterprises on prices. The outbreak of the financial crisis has led the overall economy from prosperity to recession, and the continued economic downturn in the future will weaken the role of demand in the supply and demand price model. Therefore, the change of operating rate decision-making caused by supply level cost recurrence and enterprise profit level has become the main factor affecting PTA price change. However, sluggish or deteriorating demand will only lead to a slow decline in prices, and a slight improvement in demand will become an additional stimulus to price increases

for PTA, the cost factors at the supply level and the profit level factors of production enterprises are still mainly concentrated in naphtha and PX markets, which is also the main basis for bullish PTA in June. The reason why the author has been bullish on PTA before is that he has focused on discussing the positive relationship between crude oil and PX price, which shows the price support for PTA. This is based on the assumption that crude oil continues to rise, while ignoring the analysis in the case of crude oil adjustment. The crude oil pullback started on July 1 broke the previous assumptions and analysis judgments, which made the author focus on the detailed analysis of the market where naphtha and P investment scope can be x, which caused the deviation between crude oil and PX price

first, pay attention to the cost factors at the supply level, that is, the cost supporting role of PX. In the first ten days of July, crude oil fell sharply. In the process of falling from $73/barrel to $60/barrel, PX showed the opposite trend again, and PX in Asia returned to the 1000 yuan level. This deviation is caused by multiple factors such as the tight supply and demand structure of naphtha and PX markets. At present, the inventory level of naphtha/px in the international overall distillate structure is the lowest. The inventory of naphtha in American refineries has always been maintained at 20million barrels. In april2009, 2210 can be used to make suture (biosyn reg;) Ten thousand barrels. Refining and chemical products tend to be medium distillates with high profit level (the ratio of European medium distillates to light distillates has risen to 2.5), which will further reduce the inventory level and supply of naphtha/px. However, the market pattern of supply exceeding demand in the naphtha/px market has not changed. Although China's PX plans to increase its production capacity by 7.7 million tons (10 projects in total) from 2009 to 2015, China's PX production capacity will increase from 3.68 million tons in 2008 to 11.38 million tons. However, according to the annual demand growth rate of 6.13 million tons of PX apparent demand in 2008, the improvement of PX supply and demand is only to reach a balance, and time factors should also be considered. These two factors together cause the measured force value of naphtha/loading rate to be too slow. The JPX market price rebounds first and deviates from the crude oil price, which will not be effectively alleviated in the short term

secondly, pay attention to the profit level of production enterprises at the supply level. This factor is mainly aimed at the impact of the operating rate of PTA production enterprises on the PTA market price. Despite the rapid expansion of PTA production capacity in 2007 and 2008, supply and demand remained basically balanced. In 2008, China's PTA production capacity was 13.84 million tons, the output was 9.8 million tons, and the apparent demand was 15.16 million tons. However, the impact of changes in operating rate on supply has been significantly strengthened. According to the statistics of PTA internal price and PX cost price data, the current profit level of PTA production enterprises is at a high level since 2009. It can be said that PTA production enterprises are still active in the industrial chain. At present, the focus is on whether the higher profit level of production enterprises will be reduced by the increase of operating rate, thus exerting pressure on PTA prices. It should be said that under the favorable supply and demand structure of PTA market, the amount of PTA financing trade by letter of credit caused by the financial crisis has decreased significantly (China's monthly PTA import volume has shrunk significantly), while the operating rate of PTA and polyester enterprises is 10-15% lower than the historical average level, which further supports the PTA market price. In order to pursue high profits, the production enterprises must have the intention to increase the operating rate, but the inhibition of the upstream PX market will weaken the increase of the real operating rate. The reasons for this are also discussed in detail above. In addition, the nominal high profit level does not exceed the reasonable level, and the increase in operating rate driven by PTA manufacturers may not have a great suppression effect on prices

finally, we need to focus on the secondary role of requirements in the current fundamental analysis. In the construction of the basic analysis idea of energy and chemical industry, we assume that under the conditions of continuous economic downturn and sluggish demand, the cost at the supply level and the profit level of enterprises become important factors affecting prices. If the demand level improves, the minor factors will cooperate with the major factors to start the rising market. At present, it is precisely the rising price of polyester and polyester that drives PTA out of the consolidation trend. From the overall demand situation, the downstream direct demand and the performance of the terminal textile industry seem to indicate that PTA demand is more optimistic. On the one hand, the domestic polyester load maintains an operating rate of 75%, maintains the rigid demand for PTA, and the polyester production capacity continues to increase. It is estimated that an increase of 1million tons of polyester production capacity will increase the PTA demand by about 850000 tons. On the other hand, non textile demand is increasing. For example, the expansion of polyester packaging bottles and the use of engineering plastics polyester are new demand highlights

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