The PTA Price May Drop to 9000 Yuan/Ton

    Since the futures price of PTA reached the historical record on Feb, it dropped continuously. It is estimated that the PTA price may dropped to 9000 Yuan/Ton.

    First, the volatile political situation leaded to three times oil crisis and brought negative effects to global economy. The oil price and the inflation pressure increased, causing the countries in the world implemented tight monetary policy and threatened the recovery of global economy.

    Second, the value of USD may drop more. If the crude oil price influenced by the join forces of the supply and demand and the depreciation of USD, it may increased in a long period and causing global inflation, which may threaten the global economy. It is estimated by IMF that the crude oil price increased 10%, the global GDP will decrease 0.2%-0.3%.

    Though the price of crude oil increased, the PX price was separated from the upstream oil price. The oil price is difficult to support the PTA and PX price.

    Influenced by Japan earthquake, many Japanese factories that produced PX stopped work for some time. However, with the rebuilding after the earthquake and the output pushing effects caused by the rise of PX price, it is estimated that the supply of PX will recover gradually and the fall back of PX price recently showed it. But because the supply of PX was still tight in 2010-2011, the PX price will drop just slightly. It is estimated that the bottom price of PX will be 1400-1500 USD and the cost support of PTA was weakened. It is estimated that the production cost of PTA is about 8500-9000 Yuan. According to PTA average profit distribute situation, the PTA spot price is among 9000-10000 Yuan. Thus, the PTA futures price will be firmly supported at 9000 Yuan.

    At present, the price endurance ability of downstream polyester enterprises is weakened gradually. The customers of PTA are domestic large factories, because of the considerable profit in 2010, their production and operation condition is normal. However, since Feb in 2011, the condition changed, the profits of polyester products were weakened by the high price of raw materials and the difficulty of deciding the price and it is more and more difficult for the polyester factories to transfer their materials cost.    

    In addition, influenced by the dramatically increased raw materials price and labor cost, especially the tight monetary policy of the central bank. It is estimated that the domestic textiles industry will change a lot, and some companies who are not strong enough may close down.

    In conclusion, the crude oil price may increase continuously, and the pressure of USD depreciation is big, which will threaten global economic growth. The author thought that the PTA price will mainly determined by the cost transfer ability of downstream enterprises and the market condition of supply and demand. In general, the medium-term vulnerable pattern is not changed and 9000 Yuan is the very strong support price.