How will the future PTA industry chain be interpreted?

Beginning in 2017, some low-end “big road goods” in the fabric market called “bad cloth” have earned eyeballs. The off-season is not light, the peak season is more prosperous, and the price of these fabrics is soaring. The prices of these fabrics are soaring, the orders are good, the benefits are good, and the weaving manufacturers are active.

The downstream has just needed to turn around, and the PTA industry boom has rebounded. However, the market is concerned about how long this scene can last? Experienced a baptism of environmental protection, PTA industrial chain is facing what opportunities and challenges? From March 18th to 23rd, the “Beibao” sponsored by Zhengshang and the Futures Daily, in the first quarter of 2018, Jiangsu PTA industry chain research into the first-line enterprises, hoping to find the answer.

The "spring" of the terminal market is different from "warm"

In the first town of Chinese SILK, industrial agglomeration, many enterprises. Any “wind and grass” in the fabric market in Shengze area may produce a butterfly effect.

Fully coated thin fabrics, such as polyester taffeta, are at the bottom of the fabric market. The “big road” and “bad cloth” in the mouth of textile people are the most common in the Shengze fabric market.

In the same way as in 2017, in the near future, the market has seen a phenomenon of “one cloth is hard to find”. During the investigation, the sales of grey cloths in Shengze area performed well, and some fabrics even had to queue up for goods.

The polyester taffeta is low in price and simple in production process, but it has a wide range of applications. Therefore, the demand for traditional clothing in the “Golden, Three Silver and Four Silver” season has increased significantly.

In fact, since the environmentally friendly low-end water jet loom in 2017, the supply of these “big road goods” has been greatly reduced, and the market has soared. In the off-season, the sales are smooth, and during the peak season, it is hard to find a product. One day, the price of the "bad cloth" market ushered in "spring."

“Many people say that the fabric market is booming, it is better to say that the weaving market is picking up.” According to Wu Xiaofen of China Silk Network, at present, in the Shengze area, weaving manufacturers, regardless of the big factory, take orders in two In the month, there are more than three months and six months for orders. In addition to the sufficient orders, the collection situation is also very good. "Because of the tightness of the grey fabric, many weaving manufacturers are required to take delivery of the goods. Even for the old customers who can owe money, the collection cycle is shortened accordingly." Wu Xiaofen said.

Through the visit, the Futures Daily reporter learned that the overall demand for terminals in 2018 is good, especially for weaving manufacturers, the inventory level is not high, and the confidence of the industry is enhanced.

"On the one hand, before the Spring Festival, the factory carried out the normal operation of low-price promotion, and the inventory was greatly reduced. On the other hand, with the change of concept, the time for workers to return to the city after the Spring Festival was postponed, and the factory encountered a problem of 'recruitment'. Postponed for 3-5 days. The data shows that at present, the average inventory of grey cloth in Shengze area is 25 days, the lowest level since 2013,” said Liu Hui, an analyst at Zhongda Futures.

It is understood that in recent years, terminal demand performance has been truly upward, mainly boosted by factors such as the change in people's livelihood consumption concept and the rapid growth of online shopping. At present, the operating rate of weaving manufacturers has increased rapidly, terminal demand has been started, and factory orders have been queued until around June, and some varieties are “hard to find”.

It is worth mentioning that last week, polyester raw materials opened the replenishment cycle, and the MEG price increase led to downstream purchasing sentiment, and polyester filament sales rebounded significantly. Last Monday and Thursday, some manufacturers in Jiangsu and Zhejiang reached 500% and 400% respectively. Polyester manufacturers said that the accumulated inventory during the Spring Festival was basically digested.

In this survey, an intuitive feeling of the reporter is that the downstream polyester manufacturers and terminal weaving manufacturers have more rational business ideas. The specific performance is that the stocking rhythm is stable and orderly, without the previous rush.

"On the one hand, all sectors of the industrial chain are carrying out cost accounting. Except for the normal stocking demand, if the profit space is not opened, it will not be blindly purchased, which will reduce the risk of capital occupation; on the other hand, the industry concentration will increase. The operation expands to the upstream and downstream of the industrial chain, and the internal control capability is enhanced, and the perception of small fluctuations in raw material prices in a certain link is reduced.” Liu Hui said that for the terminal, the apparel and other industries are experiencing rapid and personalized consumption trends, and fabric orders are obvious. It is characterized by a small number and a large number of batches. Once it is accumulated too much, it may face an indivisible situation.

When it comes to the market of the weaving market in the second quarter, both manufacturers and traders are more optimistic. Based on the expected growth in consumer demand, the polyester industry is still optimistic in most markets in 2018.

However, in the second half of the year, with the release of production capacity, the supply of conventional grey cloth will change from the current tension to the loose. The conventional grey cloth market in the first half of the year is still uncertain, while the jet, medium and high-end grey cloth market is less affected by environmental protection. It is expected to be relatively stable.

PTA processing fees are expected to remain high for a long time

Since September 2016, the polyester industry has entered a new round of economic cycle, and has shaken off the situation of losing money for many years in 2013. As the demand in the polyester industry improved, the operating rate increased and the demand for PTA increased. Especially in July 2017, the domestic import of used bottle flakes was banned, and the consumption of recycled staple fiber was turned to native staple fiber. In addition to the replacement for recycled polyester, the endogenous demand for polyester is also growing.

“In the second half of 2016, the sales of the texturing machine have obviously improved, with an annual growth rate of 1000-1500 units. In addition, some of the texturing machines have been modified and the efficiency has reached 1.4 times. The new ones need to be consumed every year. 2 million tons of polyester raw materials. Therefore, in addition to the increase in the operating rate of the original texturing machine, the start of new installations has also increased the demand for polyester," industry sources said.

The operating rate of the polyester industry jumped from 88% to 94%, the demand for PTA increased significantly, and PTA manufacturers also got rid of the loss situation. Beginning in July 2017, the processing fee is mostly 650-1000 yuan / ton, the highest is 1200 yuan / ton.

How long will the boom cycle in the polyester industry last? What effect does it have on the PTA market?

“In general, the polyester industry's business cycle will last for 2-3 years, and the real estate cycle is about half a year. In the first quarter of 2018, real estate has peaked, and the polyester industry's business cycle is expected to continue into the third quarter of 2018. In 2018, the new capacity of the polyester industry is between 4 million and 5 million tons,” said Yan Li, a fund manager of Tongzhou Cotton Industry.

From the point of view of the PTA supply side, in addition to the original 4.5 million tons/year capacity of Xianglu, it can be increased from 70% to 80%, and there is not much room for new production. In the view of Cai Yali, PTA will be in a favorable position in the core industrial chain of PX-PTA-polyester. The right to speak of PTA manufacturers will be enhanced, and the probability of PTA supply and demand in 2018 is in a tight balance.

At present, both PTA manufacturers and polyester manufacturers are optimistic about PTA processing fees. Under this circumstance, the proportion of contracted goods by polyester manufacturers increased, the purchase volume of spot circulation decreased, and the PTA spot transaction volume was less than one tenth of the output.

With the increase in the concentration of the PTA industry and the development of large-scale devices, the smooth operation of the device has a greater impact on the price of PTA. For example, if the device suddenly stops and stops, and the typhoon weather encounters in the summer, the market may be in a phased supply shortage.

“After the loss in the first half of 2013-2017, only a few manufacturers can ensure cash flow. For PTA manufacturers, it is normal to start the PTA processing fee improvement in July 2017, especially the polyester production profit is good, PX to PTA The processing fee of the link is 800-900 yuan / ton. It is reasonable." Cai Yali said that even some factories believe that the processing fee of 1,000 yuan / ton is the bottom. The factory is almost all contracted goods. When the equipment is overhauled, it needs to be purchased and re-delivered from PTA futures. It believes that although the polyester stocks are higher in the short term, the profits will be high and the operating rate will not decline. The PTA spot supply in 2018 Definitely continue to be nervous.

The Futures Daily reporter learned that PTA inventory has continued to decline since 2017, and low inventory will become the norm in the later period.

The Samuelson inventory effect suggests that at low inventory levels, the volatility of the spot (nearly) is higher than the long-term. Under low inventory conditions, it is easy to trigger market concerns about tight supply in the short term, and spot prices are more responsive to various sources of information. Reflected in the spread, from the CONTANGO structure to the BACK structure. The BACK structure is called a bull market structure, that is, the spot price is higher than the futures price, and the near-month contract price is higher than the far-month contract price, which is usually present when the supply is tight.

Once the price difference structure changes, it will exist in a relatively stable state. Cai Yali explained that from 2011 to 2012, PTA maintained a positive market structure for two years under the pressure of capacity expansion. In the first half of 2013-2017, the PTA market entered an absolute surplus period, except for Xianglu suddenly in 2014. Parking has prompted the market to maintain a BACK structure for some time, and the rest of the time is in the CONTANGO structure.

Up to now, the PTA market has been converted to the BACK structure for 7-8 months. In the case that the supply shortage problem cannot be solved, the market will maintain this state until the new production cycle comes, and the PTA supply becomes loose and the spread structure Will change.

Enterprises like the continuous active program of futures contracts

The Futures Daily reporter learned that during the long period, PTA overcapacity is serious. Due to the expectation of improved supply and demand in the future, most of the time since 2015, PTA futures are higher than the spot structure, and industrial customers use futures hedging and traders to buy. The arbitrage operation of the current throwing is prevalent.

Beginning in 2017, terminal demand grew strongly, PTA supply bottlenecks, and the premium and discount structure evolved into PTA futures premium spot. Under this pattern, the trading volume of industrial customers and traders selling hedges and buying and selling through futures has shrunk significantly, while the volume of transactions of downstream industry customers buying hedges has gradually increased.

As of March 26, the PTA futures market had a holding capacity of 77,414 contracts, an increase of 73,012 contracts from 4,402 contracts in mid-January; the sales volume was 135,200 contracts, a decrease of 90,292 contracts from the 225,492 contracts at the end of January. Compared with the highest number of 822,938 hands at the beginning of 2017, the number of positions was significantly reduced by 597,446 hands.

"According to the premium and discount structure of the spot market, upstream and downstream industry customers can use the futures market to adopt a mode of operation favorable to their own production and operation." Soochow futures analyst Wang Guangqian said.

Previously, PTA industry customers could only trade PTA futures in January, May and September. PTA upstream and downstream manufacturers are continuous production, production and operation and order cycle only covers 2-3 months, and the interval between January, May and September contracts is 4 months. It is not very convenient for enterprises to participate in hedging. Orders cannot be seamlessly connected to the futures market.

In order to meet the industrial demand, Zhengshang Institute launched a continuous active PTA futures contract in October 2017, and the enthusiasm of industrial customers was significantly improved.

“After years of development, PTA futures are more mature and the participation is more extensive.” The relevant people of Tongkun Group said that the continuous active contract is closer to the fundamentals, and the exchange's plan is more conducive to industrial customers to participate in futures.

The relevant person in charge of PTA sales of Hengli Group said that futures contracts are continuous market trends, which is conducive to the closer integration of industry and finance. Enterprises can use the recent active contracts as a spot sales or procurement channel to lock production more quickly. Profit or raw material purchase cost. At the same time, the near-month contract naturally has a spot attribute. Compared with the disadvantages of the financial property of the distant month contract, the production company has stronger control over the near-month contract, which is conducive to better functioning of the futures service entity economy.

It is understood that the 1803 contract as the first target contract of PTA futures, a total of 439,000 hands (bilateral), the average daily turnover of 41,000 hands, the average daily position of 104,000 hands, initially realized that "the near-month contract is active, active contracts continue" The basic goal. The PTA futures 1803 contract, which has just been delivered, has a total of 15,000 contracts, equivalent to 75,000 tons. China Petroleum (601857) International Business Co., Ltd., Shanghai Textile Investment Co., Ltd., Wanxiang Resources Co., Ltd. and other 32 PTA production, trade and consumption companies participated in the delivery, covering almost the mainstream manufacturers and trade in the domestic PTA market. Business.

“In this survey, both upstream and downstream companies have positively evaluated the continuous activity of PTA futures contracts. We believe that the continuous activeness of contracts will make the functions of PTA futures more refined.” Wang Guangqian said.

The market looks forward to the promotion of internationalization of PTA futures

After more than ten years of development, PTA has become a mature futures product, with price discovery and hedging functions, which plays an important role in China's grasp of the right to speak in the international market. Although the PTA import and export volume has contracted sharply, but the PX import dependence is still more than 50%. Many times, the spot price of PX will be affected by PTA futures. During the ACP negotiations, the fluctuations in the PTA futures market will also be closely watched.

In the industry's view, PTA futures is a very mature variety, PTA manufacturers' spot and contract prices are based on futures prices, trade transactions are 100% reference to futures prices, downstream weaving and even clothing manufacturers also refer to PTA futures prices to determine the purchasing rhythm. In addition to its application in the field of textiles and garments, PTA is also widely used in the fields of bottle flakes and films. However, looking at the world, in addition to China's PTA futures and Singapore's PX swaps, other countries' exchanges have not listed any PTA-related derivatives, and the transparency and rationality of PTA international trade pricing needs to be further improved.

In the current domestic futures market, the first internationalized crude oil has been listed, and the internationalization of iron ore is also actively promoted. PTA is a chemical with strong correlation with crude oil, and its international promotion is worth looking forward to.

“The internationalization of PTA futures is in line with the international trade pattern of all aspects of the PTA industry chain.” Liu Jian, an analyst at Xinhu Futures, said that China’s PX has a high degree of external dependence, and the price of PX itself fluctuates so much that the PX industry The demand for hedging on the chain is strong. In addition, due to the small amount of domestically produced PX, mainstream PTA manufacturers use PTA futures to lock the processing spread. The proportion of PX factories participating in hedging is relatively small, and the liquidity of swap swaps in Singapore is insufficient, resulting in incomplete structure of participants in domestic PTA futures. Promoting the internationalization of PTA is conducive to the introduction of external PX/PTA manufacturers and international institutions, which is conducive to further improving the structure of market participants.

When talking about the internationalization of PTA, most companies expressed their expectation that after the listing of domestic crude oil futures, the internationalization of PTA is more urgent.

For industrial customers, a more complete participant structure is conducive to maintaining a reasonable relationship between futures prices and spot prices, which is conducive to weakening extreme market conditions and conducive to stable operation of enterprises. From the spot side, the participation of international industry customers is conducive to rationalizing the trade flow of the PTA industry chain and maintaining a reasonable price difference between different countries and regions.

"For futures companies, on the one hand, it can expand the scope of business, on the other hand, it is conducive to the transformation of business models. Overseas institutions have higher requirements for the professional services of domestic futures companies. For example, the delivery, settlement, exchange rate risk of international industrial institutions And so on, all put forward higher requirements for futures companies, which is also an opportunity for futures companies to achieve high value-added goals. Undoubtedly, the internationalization of PTA futures will provide futures companies with a broader space for development. However, professional requirements The promotion will also lead to differentiation within the futures company." Liu Jian said.

For overseas customers, China's big market has strong appeal, and it is impossible for international large-scale industry customers to completely ignore the Chinese derivatives market. However, this also puts higher requirements on the construction of relevant systems in the domestic derivatives market. Only under the perfect system, international industry customers will participate without any concern.

Industrial companies have affirmed the efforts of the exchange to promote the internationalization of PTA. At the same time, there are also corporate leaders who suggest that in the process of internationalization, it is not appropriate to set too many thresholds in terms of rules in order to reduce the difficulty of foreign traders involved.