Review of PTA Market in October and Outlook
Author: Nov 04, 2011 14:05
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Traditionally speaking, October is the busy season of demand. However, this year is very different. The whole market stayed at a weak period in October, including the PTA market. Spot price of PTA dropped continuously, while the futures price also tumbled as the European debt crisis and weak demand affected the market. The lowest point of PTA spot price was 8650 Yuan/ton within the whole month. Even if the spot price was pulled up by the improved macro environment at the end the October, it still lost 650 Yuan/ton compared with the beginning of the month. Taiwan cargo dropped 25 dollars to 1155 dollars and Korean cargo also fell 25 dollars to 1135 dollars.
From the futures aspect, PTA futures showed shaking tendency due to the negative affects brought by European sovereign crisis after the National Day. In the mid of October, punched by crude oil market and stocks market, PTA futures slumped. In October 20, PTA futures dropped to the bottom and created a new low over a year (7988 points). However, the rumor that the domestic policy may loose and the optimistic expect of the EU summit drove the commodity market rebound systematically and PTA futures prices increase dramatically. Ended by the end of October, a deal to solve the debt crisis had been agreed by EU and favorable GDP data of US supported PTA futures to keep rebounding. On the whole, macro factors dominated the PTA prices in October, but the weak downstream market restricted the rebound of PTA.
PTA Contract
Shanghai Yadong Petrochemical, Pengwei, Ningbo, Fujian Jialong, Jiangyin Hanbang, Ningbo Mitsubishi announced their settlement price of October PTA contracts was 9750 Yuan/ton, which decreased 550 Yuan/ton compared with the listed price. Far-east Petrochemical and Xianglu Petrochemical announced the settlement price for 9750 Yuan/ton and was 250 Yuan/ton less than the listed price.
Profits of PTA Manufactures Fell
PTA price dropped dramatically in October, which led the profits of manufacturers greatly declined. If calculate by the present spot price, the producing cost of PTA is 8820 Yuan/ton and the average profit is 381 Yuan/ton which dropped 253 Yuan compared with last month, and the producing profit is 200 Yuan/ton at the end of October. Judged from the profit, declining space of PTA will be reduced as the profit has been cut down and the supportive effect of cost rose.
PTA Import Data
September, 2011, import volume of PTA was 514.3 thousand ton, up 50.9 thousand ton compared with it in August and increased 25.2 thousand ton compared with the same period of last year. The average import price of September is 1287 dollars/ton, up 7.46% compared with it in August and increased 46.19% thousand ton compared with the same period of last year.
Outlook
At present, the macro side turned better in mid October and the unbeneficial factors are also fading away. For the fundamentals, PX supply is still in short and its cost support for PTA still exists. What blocked PTA prices is still the weak demand of the downstream market now. If the downstream polyester products manufactures and weaving companies performs bad, PTA futures price may be worse. November will be a more fluctuating period for PTA market as the macro environment is not steady.
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Editor: emma From: 168Tex.com
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