From Futures Price Trend See Chemical Fiber Market
Author: Jul 25, 2011 15:27
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168Tex News: In the first half of year, PTA takes the lead in polyester industry chain price trend, less crude oil price relativity. Supply and demand relationship determines product price trend. With PTA production capacity further enlarged, PTA price weakened after February. Currently, business men still lack confidence. On MEG, there is less production increase, and the price bounce in the end of May, forms a support to the whole polyester industry chain. Traders are generally hold an optimistic attitude towards MEG market in the second half of year, thus buy in to stock up. To sum up, MEG market condition is still better than PTA.
Among chemical products, crude oil futures price trend influences more on polyamide fiber industry and acrylic industry than polyester industry. But on the general, the influence is not that obvious. From Jan to Feb, crude oil futures price fluctuates high at $90 per barrel. AN also maintained 20000CNY/t. Since the mid-term of Feb, crude oil futures price increased all the way to $110 per barrel, and AN price was boosted up, and the price fell back to $100 per barrel, but in the end of May, crude oil price went down while AN price went up. Polyamide industry chain price shows basically the same trend with acrylic industry chain, and also has the similarity with polyester industry chain. The rebound in the end of May is probably influenced by the MEG rebound.
See from crude oil and viscose industry chain price trend, there is little correlation. Viscose, feedstock, and PTA price trend is similar to some degree, namely, PTA and cotton futures correlation is big. See from supply and demand relation, PTA production capacity enlarged a lot, viscose production also enlarged a lot, and cotton cultivation are is enlarged.
Comparing by futures variety, there is a negative correlation between PTA and cotton futures price. LLDPE and PTA futures price trend shows the similarity, but LLDPE price is generally higher than PTA futures. The dow Jones index and benchmark Shanghai composite index have little impact on commodity futures.
In the first half of year, PTA futures hit the bottom price at 8600CNY/t for a short period, it rebound up slightly for the reason of MACD rebound with no volume to match it up. The MACD departure is more seen as the index correction. In the second half of year, PTA futures is overwhelmed with bad news. As for fundamental, cotton market is more bearish. PTA plants production capacity expansion is a lot, while the downstream weaving plants has no solid favorable factors. And with the grim inflation situation, interest rate raise, deposit reserve ration move will be continued, thus PTA market is bearish. While on bullish factor, MACD still goes on the contrary, it indicates the need of increase. But PTA futures turns over is low, without turns over volume to match up, PTA price is hard to increase. On the general, we should pay attention to the resistance level of 9200 and the support level at 8600CNY/t.
In my opinion, cotton market will be worse than PTA market in the second half of year. It is mainly because that cotton futures price is downward, MACD still goes on the contrary, U.S. cotton price lowered down month by month, for now the price has dropped for 50% from the original $1 per pound, while ZCE cotton has only reduced 30%. See from fundamental factors, for the cultivation area enlarged, the global cotton is expected to receive a fruitful harvest. But U.S. cotton cultivation area has not enlarged, and without floods and droughts, poor harvest is basically settled down. Cotton needs is also influenced by the slow global recovery, and the uncertain European economic safety. U.S. is not likely to hype cotton price, instead, it is likely to suppress the cotton price. China has announced the lowest purchase price of 19800CNY/t, which is the guiding price that cotton price in different countries will close to this price.
In addition, LLDPE and PTA futures price has the correlation, but only for the financial attributes. LLDPE production capacity expansion is small than PTA, even increase or decrease simultaneously, LLDPE price trend is better than PTA. Currently, LLDPE is still upward, and it is likely to go up in the second half of year. On crude oil futures, now the price is mainly above $90 per barrel. The global crude oil need is not likely to reduce greatly, for war and military exercise still has a considerable crude oil demand. Moreover, the U.S. loose monetary policy keeps unchanged, crude oil price is unlikely to weaken.
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Editor: Candy From: 168Tex.com
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