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Insight | Time:Feb 1 2018 3:55PM
PTA inventory speeds up to increase
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Polyester operating rates dropped slowly since more units shut for Chinese New Year holiday. But since bottle chip plants raised run rates, polyester operating rates sustained at above 85% and may decline rapidly in the first half of February. With Reignwood and some others restarted, PTA operating rates rebounded to above 80% and since Jan 11, PTA-polyester turned a little oversupplied. If calculate with PTA O/R at 80% and polyester O/R at 86%, PTA supply subtract demand turns out about inventory about 9 KT every day.

As a result, PTA inventory increases in PTA plants, delivery warehouse and ports. In the same time, the talking spread between PTA futures and spot prices turned from 0 to 30-50 yuan/mt.

According to the turnaround plans of polyester plants, the bottom of polyester operating rate may occur within Feb 10-20, down to about 78-79% and then rebound since late Feb. Based on a rough estimation, the average rates of polyester operation may be 89.5% for Jan, 82% for Feb and 90% for Mar. However, few PTA plants has turnaround plans for the first quarter, only Yisheng Ningbo and Dalian may shut for turnaround but undecided yet. Therefore, PTA inventory is expected to increase by around 700 KT in the first quarter (which will be updated according to market situation).

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