PX in the pre dawn darkness PTA more than a single layout bargain

Recently, OPEC production agreement entered into force for more than and 10 days, from the current members of the OPEC implementation of production process, overall good. Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, four countries in the implementation of production agreement, including Saudi Arabia since January crude oil production decline of at least 486 thousand barrels / day to 10 million 58 thousand tons / day. Angola, Algeria has notified the oil companies to cut oil production to meet production commitments. Venezuela has implemented 95 thousand barrels / day of commitment. Although last December Iraqi exports hit 3 million 510 thousand barrels a day of record highs, but the country starts from the beginning of January this year has been cut 160 thousand barrels / day, which exceeds the commitment to decrease rate of 210 thousand / day 3/4. At the same time, as the main representative of non OPEC production, Russia’s crude oil production from October 2016 11 million 250 thousand barrels a day in the post Soviet era record a decrease of about 130 thousand barrels a day, over the completion of this month to cut at least 50 thousand barrels / day of the initial target.

Overall, the producers now implement the basic production in place, even if the oil producing countries according to the agreement cut finish only 80%, the crude oil market will be in early 2017 to rebalance. The medium term, the focus of the operation of crude oil is expected in 55 to 60 U.S. dollars / barrel.

Since mid December 2016, PTA oscillation finishing. Before the Spring Festival is expected to continue to maintain the rate of about PTA oscillation pattern, the proposed bargain layout, promising holiday rally.

PX in the darkness before the dawn

The PX operation is relatively stable, PX- naphtha spreads is currently stable at 350 U.S. dollars / ton, is low since 2016, mainly with the recent strong upstream naphtha, and India trust 2 million 200 thousand tons PX device to open the. But from the beginning of the end of March, the Asian PX device will enter the maintenance area, at present, the two quarter Asian PX volume will overhaul in about 8 million 200 thousand tons, accounting for 19% of the total capacity of Asian PX. In 2015 and 2016 two quarter volume is only 4 million 500 thousand tons of maintenance. Excessive maintenance of PX device will make PX a substantial tightening of supply. On the other hand, 900 thousand tons of PTA plant in Far East 1 million 400 thousand tons and is expected to drive Peng Wei in April to restart, and the raw material stocking can aggravate the extent of demand PX. Look after the Spring Festival PX end PTA given the cost of support.

The supply pressure is PTA

January PTA equipment maintenance is not much, is expected in January PTA total inventory of 200 thousand tons, the overall poor performance of supply and demand. But recently, you can clearly see, as long as the PTA fell, have participated in polyester plant replenishment. In addition, recent mainstream suppliers are actively repurchase warehouse and spot price support still exists. According to the current maintenance announcement is expected, 2 million 200 thousand tons itsumori device maintenance plan in Ningbo in early February this year during the Spring Festival, refer to the downstream polyester overhaul, PTA market 1 – March inventory accumulation pressure is not great. From three sets of stock device production expected, Xianglu no clear date of resumption of production on 2017, half out of the possibility is low, and the Far East and Peng Wei have a stable output or to wait until after May, does not exclude the possible delays, that is to say, at least until May, the supply pressure is not PTA.

From the operation of the downstream polyester, polyester benefits in January will continue to maintain the good momentum, inventory level has to rise, but the absolute inventory is still low, the average inventory days over the same period last year dropped by half. According to statistics, during the Spring Festival this year to overhaul the polyester production capacity of around 5 million 500 thousand tons, compared to the same period last year fell 21%, which related to the good profit. From the planned new plant put into operation, the first quarter of 2017, is expected to three sets of a total of 1 million 150 thousand tons of production capacity is expected to put in the bottle, incremental demand will slow down the PTA storage capacity on the pressure, but also put more on the production capacity of polyester at. Although from the beginning of next week, polyester factory continue to enter the Spring Festival holiday mode, demand gradually come to light, but this year from the new device shutdown efforts and later put process, we are still optimistic about the holiday prices stimulating downstream demand for PTA.

In short, PTA will maintain the oscillation method.