Overcapacity: The Price Of PTA Always Runs Around The Cost Line.

The OPEC ministerial conference was held at OPEC headquarters in Vienna.

Although OPEC has reached a freeze production agreement, it has not fundamentally changed the situation of global crude oil supply surplus, and cost has relatively limited support for PTA prices.

In this case, the author thinks that the price center of PTA will move upward, but it will not change the price operation mode of the interval oscillation.

The OPEC freeze agreement has greatly alleviated the oversupply of global crude oil.

However, judging from the recent two days, the trend of PTA futures is not strong. Why is PTA performance still so weak in the case of the rise of crude oil? How will the price of PTA in the future run?

Due to the serious excess capacity, PTA industry has fierce competition, so as long as the current futures price includes reasonable processing fees, enterprises will enter the market for hedging.

As the PTA industry's participation in futures is relatively mature, PTA's warehouse receipts have been generated and delivered smoothly, which has further increased the sell-off of the market.

Next year, the third major industries that will be discontinued in the early stage will be re driving, and the new capacity of Tung Kun, Peng Wei and Shengda will also be put on the market.

Production capacity will increase significantly.

In terms of demand, though polyester performance is good this year, considering the shortage of terminal consumption and the limited space for further improvement, the problem of excess capacity of PTA will be more serious next year.

Because of the overcapacity of PTA and the need to eliminate backward production capacity, the price of PTA always runs around the cost line, which has become the most important factor affecting the price of PTA.

The conclusion of the freeze production agreement has played a strong role in boosting crude oil. If the price of crude oil can continue to rise, it will have strong support for PTA.

But what is the actual situation? According to the OPEC11 monthly report, the global demand for crude oil in the first quarter of 2017 was 94 million 600 thousand barrels per day, while the non OPEC supply was 56 million 700 thousand barrels per day.

It's 6 million 400 thousand barrels per day.

Next year, the problem of excess capacity of PTA is more serious than this year. Therefore, the operation of PTA relying on cost will not change.

If OPEC keeps production at 32 million 500 thousand barrels per day, the world's crude oil output will still reach 95 million 600 thousand barrels, or 1 million barrels per day. Even if the non OPEC production is reduced by 600 thousand barrels, the global crude oil supply surplus will still reach 400 thousand barrels per day.

Therefore, OPEC freeze production has not fundamentally changed the problem of global oversupply of crude oil.

Since the United States did not join the freeze production agreement, once crude oil prices have risen to a certain height, the crude oil drilling will be resumed.

In addition, the current global crude oil commercial inventory is at a very high level, and some countries have already had the problem of storage capacity.

Under such circumstances, it is difficult to see a sustained rise in crude oil. The probability of oscillation near the 50 US dollars / barrel - 60 US dollars / barrel is greater, which means that the cost center of PTA will move upward, but there will not be a big increase. It is not realistic to rely solely on cost to expect the rise of PTA prices.

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