International oil prices rise for 7th consecutive year! Is the little motor of PTA rising going to start?

During the National Day holiday on October 1, international oil prices were driven by multiple positive factors and successfully exceeded the US$50 mark. As shown below:

Since then, it has continued to adjust and fluctuate at the $50 mark. On Monday, Russia actively stated that it would support OPEC in limiting production, and international oil prices both hit new highs in the new year. WTI 51.35 rose 1.54 Brent 53.14 rose 1.21 US dollars. The continued rise in international oil prices has triggered rising enthusiasm for domestic bulk commodities. Petrochemical products returned on Monday, and futures prices rose one after another. However, the price increase of PTA was less than expected, and the performance was a bit lagging behind. As shown below:

On Tuesday, PTA futures had a small explosion, with the main 1701 contract rising to the 4,800 yuan mark in the morning. So after PTA has been silent for a long time, will the market outlook explode and sing all the way?
Longzhong Petrochemical Network believes that the TA market may still maintain a strong and volatile market outlook, and the room for upside may be limited. Here’s why:
1. The supply and demand side does not support the sharp rise of PTA
After the unexpected shutdown of Zhuhai BP1#1.1 million ton PTA unit on October 10, the domestic PTA operating rate fell to less than 60%. At present, the operating rate of downstream polyester remains at around 78%. Domestic PTA in October is still in the destocking stage. However, after the centralized cancellation of warehouse receipts in September, the market still has more than 300,000 tons of warehouse receipts flowing into the spot market. Looking at it this way, the domestic PTA supply is still sufficient in October. From the perspective of market supply and demand, the PTA market is not out of stock and has room for growth. will be restricted.
2. Downstream polyester performs well, but it is difficult to continue to improve
The downstream polyester market is currently in a rare golden period of “low inventory, high profits, high production and sales.” The terminal market is also performing well at present, and the strong performance of the downstream market makes it difficult for PTA prices to fall. But at the same time, the current excellent performance of polyester has limited room for further improvement, and the focus will be on the sustainability of the current state.
3. Upstream PX profits have narrowed, and it is difficult for prices to rise sharply in October
As international oil prices rise sharply, upstream naphtha prices follow suit, and part of PX profits continue to be transferred to naphtha. At present, the price difference between PX and naphtha has narrowed to around US$365, and there is still room for further narrowing in the future.
4. The degree of rebound in international oil prices remains to be seen
Although OPEC’s attitude has changed, according to Longzhong Information, it will not be easy for the international oil price to exceed 60 US dollars during the year. Moreover, whether the production reduction plan can be truly implemented in November is still under observation.
The current Asian ACP price in October is US$780, which is equivalent to the PTA cost price of more than 4,660 yuan. The current market negotiation basis remains at around 140 yuan, and there is limited room for continued narrowing. Taken together, the short-term PTA market maintains a strong trend. It is easy to fall when rising, but the space may be limited.