Opinion strategy

Crude oil rose first and then declined last week. After reaching a recent high of 43.41, cloth oil gradually weakened. In 2019, there were 6.1 million tons of PX production capacity in China, and the supply of PX increased significantly in 2019, resulting in low PX profits. This week, PX followed the rise in crude oil prices and returned to above $500/ton, and the processing fee was slightly repaired. Fuhai Chuang's 4.5 million ton plant dropped by 50% due to alkaline washing. It is expected to resume in the near future. Sichuan can increase the load to full load operation, and the demand remains high. Supply and demand show a slight destocking. According to CCFEI statistics, PTA circulation link inventory destocking 44,000 tons to 2.245 million tons. This week, Jiangyin Hanbang's 2.2 million ton device is expected to restart, and PTA is expected to accumulate slightly.

In terms of MEG, the price of naphtha rebounded within the week, and the loss of ethylene glycol further expanded, of which the loss of ethylene was more serious. The domestic coal-to-ethylene glycol plant maintains a low level of operation, and plans to restart enterprises are slightly delayed. According to CCF statistics, as of the 15th, the stock of MEG ports in the main port area of East China was about 1.372 million tons, a decrease of 11,000 tons from the previous period.

Last week Rongsheng's 400,000-ton/year maintenance device was restarted, and Fujian Yijin's 100,000-ton/year new device was put into production. The average weekly operating rate of polyester rose by 1.12% to 91.48%. Although the production and sales have partial volume, but subject to limited demand, the production and sales of polyester filaments are generally average. The number of orders is still dominated by small orders, and fewer large orders.

In general, polyester raw materials run in a short-term or weak position.

Strategy recommendations

PTA wait and see, MEG short selling on rallies (for reference only)

Main risk points

1. The progress of the epidemic triggered a significant drop in downstream demand, which transmitted upward compression of raw material profits.

2. The poor implementation of OPEC+ production cuts has caused the center of gravity of crude oil prices to collapse further.

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