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PTA Central Line Still Needs Patience.

2011/5/25 9:47:00 53

PTA Central Line Waiting

Since the two quarter

PTA

The trend is somewhat unsatisfactory, and the deterioration of the fundamentals has been unable to sustain.

high price

PTA, after April, PTA appeared unilateral price drop, early May.

Downtrend

Accelerated, the main TA1109 in May 12th, the lowest exploration of 9258 yuan / ton, compared with the previous year's high point drop by nearly 26%.

After the sharp decline in PTA prices, the market pessimism gradually revealed, coupled with the launch of new capacity in June, the market generally ignored the late trend of PTA prices.

Since last week, the rebound from the downstream rigid demand has also been weakened due to the incompatibility of the external environment. With the sharp rebound in the US dollar, the PTA price has shown signs of weakness.


The short-term price trend is complicated. Maybe we can look at the problem from the perspective of PTA industry:


First of all, the PTA industry is still in the boom cycle. Secondly, the continuous tightening of monetary policy on the fundamentals of the polyester industry needs a digestion process. Thirdly, the upstream raw material prices are mainly in the late stage or strong, and the cost supporting role will gradually appear.

Therefore, the short-term PTA price needs a repair process. It is unlikely that there will be a big rise before the end of August. From time to time, the bottoming process may be completed in August, and the bottom interval is expected to be between 8800 and 9000 yuan / ton.


PTA supply and demand analysis: late new capacity pressure is bigger, but overall supply and demand balance


From 2006 to 2007, the PTA industry experienced a large capacity development. From 2007 to 2010, the capacity of the PTA industry has maintained a relatively stable growth, with an annual capacity growth of 10% to 20%.

With the increase of domestic production capacity, the import volume of PTA has been decreasing year by year. By the end of 2010, China's PTA import dependency had dropped to 30%.

2011 is the opening year of China's "12th Five-Year" plan. At the same time, the PTA industry has ushered in a period of rapid development. It is estimated that in the next three years, the growth of PTA capacity in China will exceed 10 million tons.


Downstream polyester, according to CCF statistics, from 2011 to the first half of 2012, the commissioning rate of PTA project is still less than the expansion of polyester production capacity, that is, the growth of PTA downstream demand is faster than that of PTA supply capability. Therefore, it is estimated that the overall operation of PTA industry will still be in the business cycle in the next two years.

And after 2013, along with many PTA projects being put into operation one after another, the industry competition intensifies, or the boom will fall.


PTA industry chain: focus on stabilizing downstream demand


Upstream source of crude oil: affected by the turmoil in the Middle East and the weakening of the US dollar, crude oil prices have risen sharply this year.

Despite the impact of the US dollar rebound and the US speculation in crude oil after May, oil prices have dropped sharply. But I believe that the main tone of the upward trend of oil prices has not changed since the long term trend. Oil prices are still in the long-term upward trend channel after bottoming out in January 2009.

From the perspective of supply and demand, the new production capacity of Asian refineries will also increase the demand for crude oil after the three quarter.


Upstream raw materials, the first half of PX:2010, the PX market has been shrouded in the haze of the 2009 surge in capacity. In the second half of the year, a large area of loss has been accompanied by PX devices. Some manufacturers have adopted ways of reducing production and self-help to support PX prices, and with the failure of many sets of PX devices in Asia, the price of PX has finally come out of a weak pattern.

In 2010, the output of domestic PX was 6 million 120 thousand tons, imported 3 million 550 thousand tons, the apparent demand was 9 million 520 thousand tons, the output equivalent to PTA was about 14 million 300 thousand tons, basically the same as that of domestic PTA.

It can be said that since the end of 2008, the huge expansion of PX capacity has so far been basically digested by the PTA industry.

In 2011, China's PX production capacity increased by 1 million tons in addition to the two quarter, but no new PX plant was put into operation in the late stage.

Taking into account the new production capacity of PTA in the three quarter, the late domestic PX raw material supply is tight, and the upstream oil price is strong. In the late PX, it is unlikely that there will be a significant decline. The cost supporting role of raw materials will play a certain role in the trend of PTA prices in the second half of the year.


Downstream direct demand polyester: in the past two years, the PTA downstream polyester production capacity has increased rapidly, and this year's growth rate is still higher than the expansion of PTA capacity, the demand for PTA has certain support.

But at the same time, the polyester industry is facing the problem of "destocking", which is an important factor for short-term demand suppression.

On the one hand, in the three quarter of last year, the sharp rise in the price of textile raw materials made the downstream industry full of cash flow and increased procurement of raw materials. On the other hand, the continued tightening of monetary policy restricted the turnover of manufacturers' capital, coupled with the problem of power rationing in Jiangsu and Zhejiang provinces this year, and the stock of polyesters plant increased.

Therefore, the whole polyester industry chain needs a "downsizing" process to adapt to the current macro environment.


Downstream terminal demand Textile: since March this year, the whole textile industry has seen a busy season and sluggish demand.

The main reason is that the textile industry is facing greater uncertainty.

First of all, the accelerated appreciation of RMB makes the profits of traders compressed. Secondly, although external demand is in the way of recovery, it still faces certain uncertainties. Again, the rumor about textile export tax rebate reduction has been uninterrupted since the beginning of this year, considering the pformation of government policy orientation this year. There is a certain possibility that the export tax rebate will be lowered in the later stage, but there is still some doubt whether the magnitude of the export tax rebate is 16% to 11%.

The uncertainty of the entire terminal demand makes the downstream processing plants take the form of short-term contracts, and the order of raw materials is reduced.


From the recent trend of PTA price, we can see that the trend of PTA and its LLDPE and PVC belong to the chemical sector is divided. As of 23 days, PVC and LLDPE all set the low point of the current adjustment, while PTA continued to follow the trend of cotton oscillation.

The differentiation of this trend essentially reflects the fundamental factor that has dominated the PTA market in recent years because of its downstream textile industry rather than its chemical properties.

Therefore, the trend of late PTA needs to pay close attention to the stabilization of downstream demand.


Future market outlook and operational suggestions


Considering the supply and demand side of PTA and the status quo of the industrial chain, we believe that the short-term weakness of PTA will remain for some time, and there will be a process of bottom up in the later stage.

From the space perspective, the bottom is expected to be in the 8800 - 9000 yuan / ton line, and the bottoming process may be completed in August.


It is suggested that investors should focus on short-term trading, and investors in the middle line will be patient at the bottom.

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