PTA Market Outlook Is Still Not Optimistic.

　 In recent times, the US dollar has weakened sharply and led to a marked rebound in the international financial market, thanks to the lifting of the European sovereign debt crisis. Last Saturday, China's central bank's remarks on enhancing the flexibility of the RMB exchange rate further encouraged the rebound.

The author believes that although the crude oil has continued to move up to 80 US dollars, it seems to only bring psychological boost, inadequate cost support and the gradual shrinking of downstream demand will make PTA fall into a weak position.

Slowing global economic growth will limit crude oil upturn

From the main economic indicators recently announced by major economies in the world, the global economy is still in the process of recovery, but the recovery has slowed down. Although the PMI index of the major economies is still above the critical level of 50, the index showed a marked decline in May (except for Japan), and the consumption and employment situation remained unchanged. In recent years, the continuous weakening of the Baltic Dry trade freight index (BDI) indicates that the global economic activity has indeed declined, and that China's economic slowdown and the tightening policy in the euro zone will bring pressure on the global economic growth.

Since the end of last year, the US dollar has gone out of a wave of unilateral rise. The main reason for its sustained strength is the European sovereign debt crisis, which is a risk aversion. Recently, news of successful issuance of bonds by Spain and other countries has boosted the euro; in addition, EU officials agreed to announce the results of the bank stress test before the end of 7, which partly alleviated investors' concerns about the spread of the debt crisis to the local financial system. On the whole, the US dollar is at the top of the short term, but the high oscillation will be maintained. Coupled with the slowdown of the global economic recovery, it is expected that the international crude oil will remain under pressure in the near future.

However, the United States has entered the traditional peak summer driving season, and gasoline consumption is expected to rebound. According to the latest data from the EIA, the average daily demand for gasoline in the United States increased by 144 thousand barrels to 9 million 338 thousand barrels by the week of June 11th. This is the highest level since August 28, 2009. It may imply that the consumption of gasoline in the United States is increasing seasonally along with the beginning of summer vacation.

Let's look at the oil inventory in the US. Judging from the characteristics of inventory changes, May and June are the important inflection points in the year when stock levels rise or fall. This period is often the highest level of oil inventory. With the coming of the peak season for downstream consumption, oil stocks will continue to fall in the coming months. Generally speaking, although the stock level of crude oil and gasoline is still above the average level of the past 5 years, the continuous decline of crude oil stocks is worth considering, considering the rise of terminal demand and the improvement of refinery operating rate in the future.

Judging from the position of crude oil futures held by CFTC, the speculative fund has seen a sharp reduction in the number of increased space operations, which has become the main driver of the current oil price crash. However, according to the data released in the latest issue, the net position of speculative fund rose to 32930, which is the first time that it has recovered in the past six weeks, indicating that the speculative fund has already approved the bottom of the oil price in the area of 65-70 US dollars.

The US National Oceanic and Atmospheric Administration has predicted that the hurricane season of the Atlantic (600558), which began in June 1st, may be the most dramatic since 2005. In addition, although the Gulf of Mexico oil spill has not directly affected international oil prices, the situation is indeed developing to the disadvantage. In the United States, about 1/4 of the oil production capacity comes from the offshore areas of the Gulf of Mexico. Its crude oil production will inevitably be affected in the coming months.

To sum up, the summer is the peak season for energy consumption in the United States. High oil stocks are expected to fall from high. With the impact of the Atlantic (600558) hurricanes and other emergencies, the fundamentals of the crude oil market are expected to gradually improve in the next two or three months. However, the eurozone is plagued by the sovereign debt crisis, and the economic outlook is worrisome. The path of economic recovery is also a tortuous process. The uncertainties hidden in the world economy will limit the upward trend of oil prices. Generally speaking, I believe that the international crude oil market is expected to continue to oscillate higher, but the global economic rebound will slow down the upward trend.

Cost support is insufficient, PTA production profit is high, price limits upward space.

After the centralized release of PX capacity in 2009, the price of PX has increased significantly. At present, the market forecast of domestic PX production capacity will reach nearly 10 million tons in 2010, and it will still be a great pressure on the market. However, from the profit and loss situation of PX manufacturers, the profits of recent manufacturers have been hovering under 50 US dollars / ton, or even a loss. From this point of view, even if the price of crude oil falls, the price of PX will not drop too much. The market predicts that PX will remain at the 870-1000 US dollar range.

According to the price interval calculation, the production cost of PTA is 5850-6550 yuan / ton, and the PTA spot price is still above the 7000 yuan / ton, and the support cost of PX to PTA is obviously insufficient. It can be seen that in the more than a month of PTA price declines, the PTA manufacturers' operating rate basically stabilized above 90%. The high operating rate only shows that manufacturers' profits are still high, which will greatly limit the PTA's upside.

Downstream demand is shrinking

According to the recently released import and export data, the total export volume of textile and clothing in May was 16 billion 432 million US dollars, up by 33.53% over the same period last year. Among them, textile exports increased by 42.36% compared to the same period last year, and clothing exports increased by 27.69% over the same period last year. In 1-5 months, textile and garment exports increased by 19.31%, while textile and clothing exports increased by 29.65% and 13.12% respectively.

Although the total growth rate of textile and clothing exports has reached nearly 20%, the author is still cautious about the export situation of the whole year. Mainly based on two considerations: first, the unemployment rate in the developed countries is still hovering at high levels, and the growth of retail sales is mainly driven by the increase in the price volume, and the profit level of the enterprises has not been effectively improved; two, the appreciation of the renminbi is expected to be strong. Just last Saturday, the central bank said it would enhance the flexibility of the RMB exchange rate and implied that the renminbi would return to its gradual appreciation. The author believes that the impact of the euro zone debt crisis on China's textile and garment industry will gradually appear, coupled with stronger expectations of RMB appreciation. Textile and clothing exports in the second half of this year will not be able to maintain the current high growth situation, thus driving the downstream demand of the whole PTA to shrink.

The trend of PTA is still not optimistic.

The international economic environment is still complex, and the systemic risks such as the European sovereign debt crisis will remain uncertain. Although the international crude oil remains relatively strong, the PTA's short-term rebound is still weak due to insufficient cost support and downstream demand, and the latter trend is still not optimistic. From the technical point of view, the 7700 Yuan line will be an important resistance point for the main 1009 contract, and it is recommended that every stop should be set at 7700 yuan.