After yesterday’s “Black Wednesday” for PTA futures and ethylene glycol electronic trading, it seemed that they were not ready to give up. Affected by the sharp drop in crude oil overnight, there was another big rout today. Zhengzhou Commodity Exchange PTA futures fell to the limit in early trading, and the main 1705 contract was once The price limit dropped to 5,214 yuan/ton, which was a significant decrease of 276 yuan/ton, or 5.03%, compared with the settlement price on the previous trading day. Ethylene glycol electronic trading also fell to 6434 points in early trading, down 212 points from the opening, a drop of more than 2.5%.
As the most actively traded products among chemical products, the trend of PTA futures and ethylene glycol electronic trading has become an important indicator of the spot market of polyester and polyester. Today, the polyester filament market also experienced a sharp decline, especially POY. , most polyester factories have fallen by as much as 200 yuan/ton.
Who would have thought of such a tragic scene when polyester raw materials were having a carnival at the end of last year? As the saying goes, if you stand high, you will fall badly! It is understood that after the recent continuous decline, as of March 9, the prices of PTA’s main contract and ethylene glycol electronic trading have returned to the levels at the beginning of December last year. When cold waves hit again and again, the market has gone from being caught off guard to being at a loss today. What exactly happened in the market today? And after such a sharp decline, what subtle changes are taking place in the market?
The overnight plunge in crude oil became the main reason for the market rout
According to foreign media reports, in the week ending March 3, the U.S. EIA commercial crude oil inventory increased by 8.209 million barrels, which was nearly 6 times the previous increase of 1.501 million barrels and far exceeded the expected increase of 2 million barrels. This data has risen for nine consecutive weeks, raising the total inventory to 528.4 million barrels, setting a new record high for the same period in history for two consecutive weeks.
After the data was released, the decline in U.S. oil WTI futures expanded to $2.06, or 3.86%, setting a new low since January to $51.08 per barrel. Brent crude oil futures also expanded their decline to $1.93, or 3.45%, setting a new low since January to $53.99 per barrel.
The polyester industry is basically at the end of a large industrial chain that starts with crude oil. Fluctuations in the price of any product in the industrial chain, especially crude oil, will greatly affect other related products, causing a series of reactions. The huge drop in crude oil overnight suppressed the polyester raw material market and became the main reason for the current decline.
The abuse on the capital side of commodity futures has increased the room for decline
On the other hand, the commodity futures market has also been clouded recently, causing panic in the market to a certain extent. The bad news of the plunge in crude oil has added fuel to the flames, and the operation of a large amount of hot money has further increased the room for decline.
When futures lose confidence, what should the spot do? In the future, the author believes that aside from the uncertainties of futures, we still need to pay attention to the following issues
1. Is the spot market adjusted in place?
When discussing the current situation of the PTA market recently, the author also mentioned that due to the expectation of PX device maintenance in the first half of the year, the supply and demand situation of PTA in the first half of the year is tight. In addition, with the support of the PXACP settlement price, PTA factories are not willing to see Continue to lose money. On the other hand, although the polyester and polyester market is in the “three high” state of high profits, high inventory, and high production, the traditional weaving peak season is also coming, and after on-site investigation of the fabric market, weaving companies have always had orders. is increasing, and the mentality is cautiously optimistic. In general, after the recent correction of the polyester market, the fundamentals have been adjusted in place.
2. Has the psychological price for purchasing raw materials in the weaving market reached?
The price increase of raw materials at the end of last year caused concerns about cost pressure in downstream weaving industries. Therefore, when the author visited the market, he specifically inquired about the psychological price of purchasing raw materials. After investigation, weaving companies currently adopt the buy-and-use approach, which was generally agreed last year. The market price of raw materials around November, if the price of raw materials falls back to this psychological price, buying and using at will may turn into opportunistic hoarding. Although the current price has not reached the psychological price of weaving companies, the market is still in the game after all. I believe that this callback will make downstream companies take action.
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