From January to May this year, the trend of crude oil fluctuated up and down, which once again focused the market’s attention on the crude oil market. Oil prices fluctuated sharply, and the commodity futures market was turbulent, causing polyester raw materials to show a relatively obvious market differentiation in the first half of the year. Even in the peak season of the terminal, the performance of the polyester raw material market is mediocre, with more declines and less rises.
PX: If the upstream and downstream are not aligned, PX will not prosper during the peak season
Since January to May, the PX market has shown a trend of first high and then low. Before and after the Spring Festival, although terminal demand dropped significantly, international oil prices remained high, which formed a strong support for PX in terms of costs. In addition, the load of downstream PTA was high around the Spring Festival, and the demand for PX did not drop significantly. In addition, it is worth mentioning that before the Spring Festival, two PX units of Japan’s Tonen Petroleum and South Korea’s SK General Chemical had consecutive fire accidents. These two PX unit accidents played a boosting role in the PX market before and after the Spring Festival. PX1-2 The month is running strong.
After entering March, the benefits of PX gradually dissipated as international oil prices continued to fall, coupled with the slow recovery of terminal demand. Although PX devices were shut down for maintenance during the maintenance season in March and April, it was still difficult to offset the negative impact of weak terminal demand. PX Prices continued to fall. During the period (from the end of March to mid-April), crude oil showed a phased rebound due to OPEC production cuts. However, PX was dragged down by weak downstream demand and the market follow-up was insufficient. It was not until mid-May that international crude oil rebounded significantly, downstream PTA bottomed out, and polyester production and sales rebounded, and the PX market ushered in a small rebound. But the good times did not last long. In late May, OPEC failed, crude oil plummeted, and PX prices once again entered a downward channel. As of May 31, the price of PX in Asia closed at US$779.33/ton FOB South Korea and US$799.33/ton CFR China, a decrease of US$63/ton compared with the price at the beginning of the year and a year-on-year increase of US$18/ton.
PTA: Demand is lower than expected, good news for PTA is hard to find
Around the Spring Festival, the terminal downstream market was closed or semi-closed, but the PTA market was not affected by it, and instead performed hotly. Fires in PX equipment in Japan and South Korea triggered speculation on the cost side of PTA. After the Spring Festival, the effects of PX accidents continued to ferment, and the stress on PTA increased, causing PTA prices to continue to rise. From January to February, under the positive influence, the price of PTA ran firmly at a high level of more than 5,000 points.
In March, crude oil plummeted, the cost side collapsed, and the downstream demand for polyester has not yet picked up. Under the negative pressure, the PTA market continued to decline. Although the PTA market load dropped from April to May and the market destocking process was obvious, the good supply and demand pattern cannot significantly boost the weak PTA market. On the contrary, the commodity futures market was suppressed by short sellers, and the PTA futures market suffered heavy losses, which suppressed the spot market. The weak PTA market lasted until mid-May before improving. Driven by the three forces of crude oil, futures and demand, the current PTA futures market stopped falling and rebounded. However, in late May, the trend of crude oil changed again, oil prices fell like a waterfall, and PTA’s upward path came to an abrupt end. As of May 31, the quotations in the internal market were concentrated at around 4,700 yuan/ton, which was a decrease of 620 yuan/ton compared with the beginning of the year and an increase of 180 yuan/ton year-on-year.
MEG: The market situation was seriously overdrawn two years ago, and the market suffered a “quick freeze” after the new year
The market situation of ethylene glycol this year has been the most unpredictable for the market. Before the Spring Festival, driven by strong demand and supply, the price of ethylene glycol continued to reach highs during the year. As the market continues to bullish, after the Spring Festival, the market for ethylene glycol suddenly cooled down, starting a plunge that lasted for more than three months. It almost gave up all the gains since October last year, and the market was sluggish. Alcohol spot trading was blocked and market inventories remained high, further suppressing the ethylene glycol market. Entering May, the import volume of ethylene glycol is relatively low, coupled with the centralized maintenance of domestic equipment, the spot supply of ethylene glycol is in short supply. Due to the bullish speculation and the protection of the market by major manufacturers, ethylene glycol ushered in a bull market in May, and the multiple daily limit increases in electronic trading pushed the spot price to a high level. However, after crude oil continued to decline and bulls took profits, the decline in ethylene glycol reappeared. As of May 31, the internal price of MEG was around 6,730 yuan/ton, and the external price was around 790 US dollars/ton, down 1,340 yuan/ton and 150 US dollars/ton respectively from the beginning of the year.
It has now entered June, and with the terminal off-season approaching, the market has become more cautious. Although the crude oil market is still changing, the hype in the news has not substantially changed the current situation of oversupply of crude oil, and the road to international oil prices is still bumpy. For polyester raw materials, terminal demand during the peak season is expected to increase.The stimulating effect is still limited, so the demand has shrunk in the off-season. With the supply of polyester raw materials being sluggish and inventory backlogged, can the market still have a major breakthrough without a sudden positive stimulus? From a fundamental perspective alone, June may only be a bit weaker for polyester raw materials.
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