PTA: Will The Limited Price Guarantee Union Come Again?

Driven by profiteering and strong market demand, the PTA industry started a rapid expansion process.

From 2009 to 2014, the average annual growth rate of production capacity reached 24.7%, much higher than that of the downstream polyester link. 10.2%.

With the pformation of supply and demand pattern, coupled with the global economic slowdown in recent years, the PTA industry has gradually entered a recession. Overcapacity and production losses have become normal.

The PTA industry chain became worse after July 8th.

On the same day, commodity futures fell completely, and PTA futures suffered a drop in price. The price of the whole industry chain also dropped sharply, and the market was worried.

Subsequently, PTA factory production losses more serious, as of July 29th, PTA manufacturers average loss of 327 yuan per ton.

The same loss situation makes the market unable to help but think of the limited production and price protection Alliance launched by industry giants last year.

In fact, since July, rumors about "limited production and insured prices" have been continuously heard.

In late July, the PTA plant in China seemed to have taken the lead in the re implementation of joint production restriction, and announced its overseas maintenance plan from 8 to September, including the parking inspection plan of Hengli petrochemical, Jiangyin Hon Bang Petrochemical Company and BP Zhuhai and other 7 million tons of capacity.

Does this mean that the price of the alliance will hit again?

"There have been rumors that Yi Sheng has been there for some time.

There is a plan to reduce production by 20%. In fact, Yisheng Petrochemical only adjusts relevant production plans according to its own production and operation conditions, and there is no plan for joint production reduction with its peers.

A market person close to Yisheng Petrochemical said to the futures Daily reporter.

about

Factory once again

The possibility of a very high price, Li Hai, deputy general manager of Hengli Group, thinks that the trend of the industry operation is not decided by one or two enterprises, but more depends on the market.

Later manufacturers will still insist on high load operation, and when the cash flow is too bad, the factory will repair it spontaneously.

From a reporter's survey, most PTA factories still rely on the strength of the market to carry out the survival of the fittest with the help of cost production advantages. Because of the higher production costs and the lack of competitive advantage, small factories are more prone to spontaneous shutdown and maintenance under the condition of poor cash flow.

Therefore, like last year, big factories and small factories followed the large-scale production and price guarantee action.

"Although the loss is serious, but the major manufacturers have changed the strategy of last year's price limit, that is to use their own scale to keep the market share and squeeze the competitors' living space."

China Financial Futures analyst Qi Mingzhi said.

"Compared to last year's Alliance price, in the current PTA factory competition intensified, the industry again limited production insurance price is unlikely, even if there will be less than last year."

Wang Guangqian, a futures analyst at Soochow, believes that limited production may not be able to protect prices, but cash flows must be guaranteed.

"In the increasingly fierce competition in the PTA market, relying on cost pricing, the deterioration of PTA cash flow will definitely lead to PTA factory parking inspection."

"Limited production insurance is not in line with the long-term interests of large enterprises. It may boost the market in a short time, but it is not sustainable."

Shenyang Wanguo futures analyst Gong Qingbin believes that only through market means to adjust some of the capacity to withdraw, the PTA market will be able to long-term healthy development.