Low PTA Consolidation Due To Sluggish Demand

Last week, when China's CPI will see a fall in June and the domestic macroeconomic regulation and control will slow down, the risk appetite of commodity markets has improved after the Greek parliament passed the plan and the European and American economic data have improved. PTA futures also welcomed a rebound after the sharp fall in June.

As of last Friday, the main contract TA1201 closed at 9010 points, an increase of 4% compared with the previous Friday, and the total position increased by 3760 to 414492.

Spot, due to the impact of new capacity, even if

On the macro side, China and the euro area raised interest rates last week to fight inflation, but the rate hike has been fully anticipated, so it has little impact on the market.

Last Friday, US labor department data showed that in June, the number of non farm employment in the United States increased by only 18 thousand people, which is far from the expected growth rate of 90 thousand, and the unemployment rate rose to 9.2%. President Obama said in a speech at the White House 8, that lifting the US employment market is still a long way to go, and we need to take various measures to stimulate economic recovery and create employment.

Last Saturday, China's National Bureau of Statistics announced that CPI in June reached 6.4% year-on-year, the highest since July 2008, and basically all categories of consumer goods prices are rising, showing a trend of inflation. Therefore, the market expected that the possibility of CPI peaking in June would be reduced, and that in the second half of this year, the macroeconomic regulation and control policy is expected to maintain tightening in the first half of the year.

Strong rebound in crude oil costs PTA support.

In June 23rd, IEA held an emergency press conference in Paris. It announced that 2 million barrels of oil reserves (crude oil and refined oil) will be released every day in the next 30 days in order to make up for the gap caused by the supply disruption in Libya, a total of 60 million barrels.

On the day of the announcement, Brent crude and WTI crude of the United States both reached a decline of more than 4%.

But ironically, crude oil prices have bottomed up in three days. At present, the price of Brent crude oil is 3.9% higher than that in June 22nd. This indicates that in the context of global daily crude oil consumption as high as about 80000000 barrels, unless the production of oil producing countries has increased substantially, IEA's intervention of 2 million barrels per day actually has little effect.

On June 29th, Badri, Secretary General of OPEC, said that OPEC would not hold any emergency meetings before the regular meeting in December. This implies that OPEC crude oil production will remain the status quo before December, and that the price of crude oil will benefit from the high supply and demand pattern of the tight supply and demand, thus supporting the cost of PTA.

In the second half of last year, the sharp rise and fall of cotton prices this year prompted some manufacturers to switch to use.

In the second half of 2011, there will be an increase of 4 million 500 thousand tons of new PTA capacity in the second half of the year. Now Yisheng Petrochemical's 2 million 700 thousand tons of new capacity in Ningbo and Dalian have all been put into operation.

The direct impact of new capacity is the decrease in production profits. Since the beginning of February, the profit of PTA has decreased from 2100 yuan / ton to less than 800 yuan / ton.

We believe that there is little room for production profit to fall when the domestic inflation environment remains unchanged.

If the prices of upstream crude oil and PX and other chemical raw materials remain at a high level, then the drop of PTA will not be enough.

On the whole, we believe that the price of PTA futures is expected to oscillate between 8500 and 9200 in the short term. It is suggested that investors should take short cycle trading as the main factor.