CICC Online: PTA Downstream Needs Support &Nbsp; Short Term Is Expected To Rebound.

After the low-level oscillation in June, PTA's main contract was supported by the 7000 yuan line, and there were signs of stabilization and stabilization.

Through the analysis of its fundamentals, I believe that the PTA market is expected to launch a rebound trend.

The European debt crisis eased.

Since June, the European debt crisis has eased, and the panic on the market has gradually weakened.

In addition, the British Chancellor of the exchequer Osborn said in an interview with the media that Britain could avoid falling into a Greek crisis.

The Japanese government also announced an overall assessment of the economy, saying that the Japanese economy has been steadily recovering and is laying the foundation for a self sustained recovery.

Although the pace of recovery in developed countries is slower, the overall pattern of the continued steady recovery of the global economy has not changed.

Affected by this, commodity markets began to stabilize, while the US dollar fell.

After entering July 2010, the crude oil that had gone through two bottom searches was also supported near the US $71 and launched a strong rebound.

China's economic recovery is even more obvious, and the continued improvement of the economic environment will obviously boost the demand of PTA.

There is limited space for raw materials to fall.

crude oil

After the sharp fall in April and May and the low level oscillation in June, the crude oil price has gained some support over the 70 yuan / barrel and began to stabilize and rebound.

Although the pace of global economic recovery has slowed down due to the impact of the European debt crisis, the keynote of recovery will not change. The impact of the European debt crisis is gradually decreasing. The steady recovery of the global economy has led to a certain increase in the demand for crude oil.

But at the same time, we also see that because of the slow economic recovery in developed countries such as Europe and the United States, the stock of crude oil in the market continues to rise.

From the EIA crude oil inventory report, we can also see that the current stock of crude oil has been at a historical high level, which has suppressed the price of crude oil.

Comprehensive assessment, I believe that the crude oil will maintain the pattern of interval oscillation.

Naphtha, mixed xylene, p-xylene, ethylene

Since mid May, the European debt crisis has intensified, and the upstream raw materials of PTA have fallen sharply with crude oil.

Naphtha, xylene and ethylene have returned to the three quarter of 2009, and the price of PX has dropped to the level of the first quarter of 2009.

The profit margins of various raw materials have also been significantly reduced. Except for PX's profits above $50, naphtha and MX prices have dropped to below $50.

The profit margins for naphtha were reduced to $24.

We believe that the profit margins of PTA upstream raw materials have been extremely compressed, and the latter will show a pattern of easy to rise and fall.

Once crude oil bottom is picking up, the raw materials will start a more vigorous rebound.

At present, there are still many unstable factors in the domestic and foreign markets, and the whole polyester market is still in the pattern of weak oscillation.

Statistics show that in June, the profits of polyester products were better, and the operating rate of factories remained stable, and stocks were generally low.

After the rapid fall in April and May, the willingness of the enterprises to purchase will rise significantly, which will support the PTA price to a certain extent.

In 2010, China's textile and clothing demand was strong, and domestic sales grew by more than 25%.

Domestic clothing consumption growth began to outstrip exports in 2007, and has maintained more than 20% growth since then.

With the increase of domestic residents' income level and the acceleration of urbanization process, the growth momentum of textile and clothing domestic sales will continue in the next few years.

In the context of foreign economic trend is still unknown, and the appreciation of the renminbi is expected to strengthen the background, domestic sales growth will become the main driving force for the development of China's textile and garment industry.

In addition, China's textile and clothing exports have also maintained a pattern of steady recovery.

At present, there are two risks in the European and American economies, but the employment rate indicators have stabilized and are showing signs of improvement.

The improvement of employment rate usually means that consumer demand will gradually pick up, and clothing demand will be dominated by rigid demand growth.

According to the data of the General Administration of Customs in 1-5 months of this year, China's textile exports have maintained a steady recovery pattern.

And the recovery of downstream demand will powerfully pull the demand of PTA, and then form a strong support for PTA price.

In summary, the author believes that after two straight days of sharp decline, PTA is expected to come out of a wave of rebound.

Operation, short-term investors can buy at the current point, if the breakthrough line 7350 can continue to increase positions, stop loss price of 7070 yuan.

For enterprises, the space for PTA to continue to fall down in July is very limited. It is suggested that corporate customers can buy hedging in this position to avoid unnecessary losses caused by fluctuations in raw material prices.

Arbitrage operation is a good choice for companies with strong financial strength or spot background.

PTA is a very active breed. Its current price often fluctuates between -300 and 300 yuan, and there are more opportunities for arbitrage.

Conditional enterprises can focus on the price difference between PTA futures. Through calculation, as long as the spread is greater than 100 - 150 yuan (near contract), there is room for arbitrage.

In addition, the intertemporal spread of PTA is relatively large, which provides investors with a better opportunity for intertemporal arbitrage, and investors with a higher accuracy in market direction can also do this.