PTA Will Maintain a Rebound Pattern
Author: Dec 13, 2011 12:01
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168tex News: PTA futures’ prices have kept a rebound over a week, upgrading the price obviously. Now it is not likely to fall below 8000CNY. 1st Dec, for the positive boost that China central bank will down regulate deposit reserve rate, 1025 contract price jumped over 8400CNY/t, and then the price fluctuated upward. Since the beginning of December, the rebound has been over 5%.
15 Euro zone countries have been down graded to a observe list. Germany and France may loss AAA credit rating. Future of the debt crisis is still uncertain.
November, China, Europe PMI data has broken through the wither flourish boundary. RMB exchange rate at sight for six days in a row hit drop stop, making people wonder whether RMB depreciation may boost exportation or not. And meanwhile, people have become worried about a possible economic downturn.
With the influence of geopolitics, crude oil price again mounted up to a high level. As is said, Jan 2012, EU is likely to support Iran on oil embargo. The exportation to China, India, Japan and Korea takes 60% of the whole crude oil export of Iran. If finally realize the sanction against Iran or the war broke out, crude oil price may fluctuate fiercely.
23rd, Nov, Sinopec has invited enterprises of PTA industry both upstream and downstream, holding PTA market situation conference. Representatives that join the conference have fundamentally reached an agreement of limited production price. Currently, the downstream provisionally demand recover has driven the whole PTA market to stabilize. Production of some PTA manufacturers totally mounted up to 5950 thousand ton. In 2011, PTA domestic output is over 20000 thousand ton, from which, we can see, the production restriction takes a big part.
For the influence of PTA production restriction, upstream PX price has not followed up to rebound. Currently, the price is still below $1400/t. For the crude oil price stays high, PX down room is limited. December PX Asian ACP is announced at $1390/t CFR, according, the PTA cost is 8200CNY/t. Counting on the current oil price, PX manufacturers has cut price by large that its profit has been narrowed around $100/t.
According to statistics of CCF, since December, operation of downstream weaving plants has recovered by 8%~9%, rebounding to 60%. Influenced by which, and in addition with the stock up, PET plants production and consumption rate increased sharply, and the rate is rebounded to 400%~500%, with individually rebounded up to 900%. PET products price jumped up all fronts. For the production and consumption rate rebounded, PET stock reduced distinctively. In Jiangsu and Zhejiang market, poly yarn stock amount is universally reduced by 4~6 days. In Jiangsu province, some FDY majored plants have reduced its stock by 10 days. Currently, FDY, POY high-speed spinning stock level is around 7~9 days, while POY mainstream 150D is offered 11750CNY/t, and the price rebound since the end of Nov has been over 500CNY/t.
Comparing with that of November, December average price of PTA is likely to go up, and the provisionally price bottom may reveal. But for the spring festival is closing, downstream loom operation rate goes down, which may curb its rebound. Moreover, PET plants production stop to check and repair work and also the load decrease plans in December is increasing.
Generally speaking, the production curtailment and value support policy usually plays a big role on PTA price change. For example, Nov, 2008, the industry output reduction had driven the market price rebound in a row. March and August this year, PTA production stop and repairing work has played some effect to stabilize the market. The provisional bottom of PET industry has been revealed. But the unexpected down regulation of deposit reserve rate, in the short term, plays stimulation to both upstream and downstream market players.
Now the overall PTA industry chain is in an inventory off period and relatively the balanced pattern has come. In November, macro economic data is published gradually, but it still needs some time for the real economy to recover. It is estimated that PTA will maintain a rebound pattern in the near future, with a wide range fluctuation. Previously PTA 1205 contract price jumped up, afterwards, the price is in adjustment at a high price level.
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Editor: Candy From: 168Tex.com
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