PTA focuses on maintenance rhythm and cost-driven

Recently, the PTA market has been steadily increasing. 

The core logic lies in the cost drive. Fuhaichuang and Hanbang parking maintenance are just icing on the cake. 

In the context of overcapacity, the fundamentals of PTA are still under pressure as a whole,

 cost-driven will dominate future market trends, and maintenance activities will only affect the market rhythm.

 
There are two logics for the recent strength of the PTA market: one is the cost-side drive, which is also the most important
 
 upward push; the other is the centralized maintenance of PTA manufacturers, the supply is substantially reduced in stages, 
 
and the market has changed from the expected accumulation of stocks to the reality of destocking. How will the future PTA market 
 
be interpreted? Is the core logic sustainable? Our point of view is: cost-driven is the core logic, and PTA factory maintenance 
 
is the icing on the cake. How far the market can go next depends on the continuity of the above two aspects.
 Brent crude oil futures oscillated upward after bottoming out on November 2, 2020, while CFR China PX steadily rebounded after

 bottoming out over the same period. The price trends of the two are in line. However, the PTA market is slightly lagging behind, and the futures index began to rebound after seeing the second low of 3246 yuan/ton in history on November 9 last year.

 
	
	
	
 
 From the data point of view, oil distribution has the largest increase, followed by CFR China PX, and PTA spot spot has the
 
 lowest increase. The reason is that the appreciation of the renminbi exchange rate has led to a lower increase in PTA
 
 production costs than PX, and the increase in PTA futures' spot prices is much lower than the increase in costs. This shows
 
 that PTA factories have failed to pass the cost to the downstream and the industry's processing fees have been greatly reduced
 
 in the past two weeks.
	
	
	
 
 
	
	
	
 
In 2021, there are still more than 10 million tons of PTA equipment planned to be put into production, and the recovery of 
 
demand is obviously difficult to digest the huge supply increase. The market overcapacity is already a clear sign. In addition 
 
to the nearly 4 million tons of PTA inventory, the market supply and demand level is difficult to support . In this environment,
 
 the PTA industry can only achieve production capacity clearance through low profits. The industry processing fee is expected to
 
 continue to be compressed at a low level. Benefiting from the expectation of global economic recovery, the center of gravity of 
 
oil prices is likely to rise gradually, so the cost side becomes PTA The core driving force of the market.