PTA Faces Three High Points: "High Profit, High Load And High Surplus".

　　 Although the PTA price after the Dragon Boat Festival has been rebounded sharply by multiple positive incentives, but in view of the vicious circle of "high profit - high load - high excess", I believe that the trend of PTA's medium-term downward trend will not change.

　　 RMB The European Union's summit has passed a series of reform plans, with a view to leading the EU out of the debt crisis and pushing the euro to rebound, and the international crude oil prices have been stimulated by the demand for gasoline. (by the week of June 11th, the US gasoline consumption showed an upward trend. In the past 4 weeks, the consumption demand for refined oil increased by 13.6% over the same period last year), so as to jointly boost the recent PTA price rebound, and the TA1009 of the main contract rose to 7550. Looking ahead, in view of the current domestic PTA spot market continues to be in the vicious circle of "high profit - high load - high excess", I believe that the trend of PTA mid term downtrend will not change.

Macro: the external debt crisis is booming, and internal interest rate hikes and appreciation expectations are increasing.

Spain's 10 year and 30 year treasury bonds have strong demand, and the subscription scale is 3 billion 500 million euros, which is at the top of the target area. To some extent, investors' concerns have been alleviated, but objectively speaking, the possibility of further deterioration of the euro zone debt crisis still exists. In June 14th, Moodie, one of the three largest rating agencies in the world, dropped Greece's sovereign credit rating by four. At this point, Greece's rating has been considered by the international top three rating agencies as "junk" level. Spain's economic situation is also not optimistic. In June 13th, the Bank of International Settlements (BIS) released a report that by the end of 2009, banks in France and Germany had the largest exposure in the highly indebted countries of the euro area, about 958 billion US dollars, and almost half of their exposure was in Spain. According to the data released by the Spanish Central Bank in June 18th, the proportion of non-performing loans to total loans in the country rose to 5.39% in April, and the total amount of non-performing loans increased by 2 billion 500 million euros.

In terms of domestic economic environment, interest rate increases and appreciation Expect double warming. May CPI An increase of 3.1% over the previous year, breaking the upper limit of moderate inflation 3%, the government departments or will increase the intensity of inflation and advance interest rate schedule. The pressure of external renminbi appreciation is also increasing. The US House raising Committee said in June 16th that if China did not quickly increase the value of the renminbi, Congress would pass legislation to force it to adjust the RMB exchange rate.

Crude oil: high inventory weakens oil prices in the peak season of gasoline consumption

The arrival of the peak summer driving season has effectively stimulated the growth of oil consumption, but persistent high oil inventories pose a potential threat to the rise in oil prices. The latest EIA inventory report showed that by the week June 11th, US commercial crude oil inventories increased by 1 million 700 thousand barrels (the stock market had expected to drop by 1 million 200 thousand barrels). The latest unemployment rate and new housing starts are also disappointing, weakening the rebound power of crude oil. By the week June 11th, the number of jobless claims in the United States rose to 472 thousand from 460 thousand in the previous week, and the number of new housing starts dropped by 10% in May, the lowest level in 5 months.

PTA industry "high profit - high load - high excess", price potential downward pressure.

PX accelerated decline to boost PTA production profit

At the beginning of 2010, Asia's naphtha and heterogeneous MX were vulnerable, and PX cost support loosened. At the same time, a number of PX production devices were restarted or operated at full capacity. The spot supply of PX increased significantly, and prices continued to fall. Before and after the Spring Festival, the PX load in Asia continued to occupy a high position. Some traders said that the vast majority of PX devices in Asia were running at full capacity, and the spot supply was obviously overabundant, and the market was accelerating. In view of the PTA market, spot prices are basically stable, with a much smaller fall than PX. By mid June, PX Korea FOB quoted $897 / ton, down 219 US dollars / ton or 20% compared with the beginning of the year. The price of PTA external CFR China is $840 / ton, down 120 US dollars / ton or 12.5% compared with the beginning of the year, and the price of the internal offer is 7000 yuan / ton, which is 1060 yuan / ton or 13% lower than the beginning of the year. PX accelerated decline directly increased domestic PTA production profit margin. In 2010, the profit of domestic PTA manufacturers was significantly higher than that of previous years. In 2010 1, June, the average production profit of PTA was 1235 yuan / ton, compared with the average profit of 600 yuan / ton in 2009. In the near future, although the price of Asian PX has been slightly rebounded by the rise of naphtha, the long-term pattern of overcapacity has laid the tone for PX's weak downlink. Therefore, PTA production profits do not rule out the possibility of further growth.

High production profit to increase PTA plant load

As mentioned above, PX fell far more than PTA, and production cost dropped significantly, which significantly improved the profit margins of domestic PTA factories. Driven by lucrative profits, domestic PTA manufacturers are actively motivated by production. According to statistics, the domestic PTA factory load in the first half of 2010 has been maintained at a level of over 90% for a long time, or even close to full load operation. The stimulation of high production profit to domestic PTA factory load is obvious.

Factories continue to operate at high loads to accelerate oversupply of {page_break}

PTA plant continues to operate at high load, and domestic polyester demand is in the transition from peak season to off-season. Downstream polyester and loom load is at a low level of 80% and 70%, which is far different from that of PTA factory with high upstream operation. In the future, the oversupply of domestic PTA spot market tends to be deepened, which is a potential downward pressure on PTA price.

The growth rate of the textile industry has slowed down in the terminal market. According to the National Bureau of statistics, the industrial added value increased by 18.5% over the same period in 1-5 months, 0.6 percentage points lower than that in 1-4 months, of which the textile industry grew 12.2%, down 0.2 percentage points from 1-4 months. On the export side, the appreciation of the renminbi is expected to increase, which will impede the export of domestic textile and clothing. It is reported that the Ministry of Commerce, Ministry of industry and information technology is carrying out stress tests on labor-intensive industries. It initially estimates that the net profit of textile and clothing, shoemaking, toys and other labor-intensive industries will directly drop by 1 percentage points per appreciation of 1 percentage points. Polyester market performance is not good, polyester staple fiber production load is stable, supply of goods is generally abundant, and downstream market procurement is relatively limited, continue to maintain on-demand procurement strategy, market turnover is difficult to materiality. The market of polyester filament is facing the same predicament. At present, the weaving enterprises in the lower reaches of Jiangsu and Zhejiang mainly rely on pre consumption stock, and the enthusiasm for purchasing raw materials is not high, and the production and sale of polyester products are decreasing obviously. Polyester chip market continued low consolidation, low prices of raw materials aggravated the wait-and-see sentiment of manufacturers, while downstream demand declined, production profit was not good enough to suppress its production enthusiasm, start-up load was slightly reduced, and PTA procurement demand was reduced.

To sum up, under the big pattern of upstream raw materials falling sharply and downstream demand turning gradually, the vicious circle of "high profit, high load and high excess" in the PTA industry will suppress the downward trend of the price in the medium term.