PTA: Continuous Decline, Really Bottomless?

In the last three days, PTA1's monthly contract position increased by nearly 300000 hands. At present, the position has reached a record high, while the price has dropped by nearly 200 points.

Multi point of view: the historical low point, is about to rebound, the industrial chain can not bear sustained losses, shutdown maintenance is inevitable.

Each has its own reason and does not give in to each other. At present, the multi perspective is long-term, with the expected nature. The air side view is immediate and realistic. In the short term, the air side is still in the dominant position.

PX has also expanded greatly in China in recent years. I haven't found the gross profit of PX. I don't think it will be very good. A year seems to be a loss. ExxonMobil suspended 450000 tons in the first ten days of June for a month, and there is no clear time to return to work. As many as 400000 tons of new Japanese oil, PX is planned to shut down in October 2021. There are also many companies to reduce the burden. In the future, some enterprises may speed up the exit of PX.

First, the total profit loss of naphtha PX PTA industry chain cannot be sustained for a long time. High cost marginal devices are all about stopping expectations.

Third, it is unlikely that the RMB will continue to appreciate unilaterally. Once the US situation is clear, the RMB exchange rate against the US dollar may be relatively stable.

PTA rise is limited, can meet high short reasons:

Second, new PTA plants are still coming, and the pressure will continue to increase.

First, is it because of overcapacity that prices must not rise?

Iron and steel industry capacity is not excessive, inventory is not high, the price is still rising.

Third, at present, most of the firm offers on the market are hedged by sellers, because the price of the disk is higher than that of the spot. But once the disk price continues to fall sharply, falling far below the market's expected price, will there be multi-party approach to do inventory. If the price really falls to the expected position of many parties, they should have the incentive to build inventory on the disk. If they buy from the spot market, the capital and warehouse costs are also very large. We boldly estimate that if the disk price continues to plummet to 2800 points, the hedging power of both long and short sides will change. Can we understand that the reason why prices have not rebounded substantially is that the prices have not fallen enough and that the current prices have not fully reflected the pessimistic expectations of the market?

We can not predict the changes of crude oil price and RMB exchange rate, and can not accurately measure the production cost of PTA. Moreover, we have no way to control the decision-making of managers in PTA and PX production enterprises. We're facing a black box.

In this case, we need to find probability tools - time window, trend - direction of capital change and options - risk control tools to help!

We still believe that late November to early December is the time window for PTA prices to rebound to a certain extent. The greater the current price falls, the more fully it responds to negative factors, and the greater the rebound in the future.

PTA price may not be in the end, but the long people exceed the short people, and gradually will form a periodic bottom. We should wait and see the results of the game between the long and short sides.