PTA Midline Decline Deepened, Polyester Products Are Weak.

The PTA fundamentals gathered in bad shape. In May 31st, the central line dropped further after hitting 7844 points earlier, with the target below 7000.

Since May, the European debt problem has deteriorated, coupled with the weakness of US economic data, and crude oil has started a plunge in prices, thus giving the original fundamentals very fragile.

One disaster after another.

In the past month, the PTA1209 contract has fallen 790 points, or 9.23%, below the low of November 2011.

The sharp drop of crude oil appears when the bad data are attacked frequently.

In June 1st, the EIA report showed that US crude oil inventories increased by 2 million 200 thousand barrels during the week, refreshing the 22 year high since 1990.

Subsequently, the US non farm report showed that the number of non farm employment in the United States increased by 69 thousand people in May, the lowest level in a year, and the unemployment rate rose to 8.2%.

In addition, the growth figures for non farm payrolls in March and April were also revised down.

In the past May, crude oil futures in New York fell by 17%, the highest monthly decline since December 2008.

The Greek problem has not yet been resolved, and the euro area is uncertain, coupled with the weak economic data reported by the United States, and the US oil stocks remain high. Therefore, WTI has little chance of a rebound in the near future.

PX is facing oversupply in the short run as crude oil slumped.

The collapse of crude oil has reduced PX prices no longer. PX prices have fallen by 13% in a month, and Asian PX prices are approaching us $1300 / tonne.

Although the price of PX has gone down sharply, PX producers still maintain a profit of around us $200 per ton, as the price of upstream naphtha is lower than that of crude oil, but PX suppliers everywhere are no longer optimistic about the trend of PX in the future.

On the one hand, the prices of listed brands dropped sharply in all parts of the country in June.

In June, PX Asian contract price was finalized at 1355 US dollars, lower than US $195 in May. Sinopec PX June listing price is 10800 yuan / ton, lower than May 1000 yuan / ton.

On the other hand, domestic PX faces oversupply in the short run.

According to the April PTA production accounting, the domestic PX surplus was 130 thousand tons in that month.

In the next few months, there will be new PX capacity release in China, and domestic PX supply will be loose in the near future, plus PX production profit is considerable. Later PX will still have much room to fall.

Cost supports collapse, PTA will expand peak production

Between 3 and April, the PTA, which was basically weak, showed a strong resistance against the support of raw material PX.

The collapse of PX in May led to the collapse of PTA cost and opened up a downward path.

As PX declined more than PTA decline, PTA manufacturers began to turn a profit in the near future, and now each production of 1 tons of PTA makes a profit of around 100 yuan.

This is a long drought for manufacturers who have repeatedly delayed production capacity.

In May 21st, the new plant of 1 million 400 thousand tons of Far East Petrochemical Company began to put in trial run. At present, there are 700 thousand tons of trial run ahead of schedule. From July to July, the new 1 million 400 thousand ton new equipment of Tong Kun stock (601233, stock bar) will also be put into operation.

Therefore, the overcapacity of PTA will peak in the coming months, and PTA, which will lose its cost, will be difficult.

Polyester production and marketing slump, stock up again

downstream

The price is also weak. Among them, the price of polyester staple fiber decreased by 4% in May, and the average price of all kinds of filament fell by about 6%.

Even so, the production and sale of polyester has not increased. The stock of polyester factory has gone up again, especially the DTY inventory of polyester has reached more than 30 days, while the normal stock level is about 10 days.

Demand side, terminal textile enterprises operating rate for a long time at around 60%.

The whole polyester market has formed a pattern of "lack of support and lack of demand". The market is pessimistic and the prospects for terminal textile enterprises are dim. The market generally believes that the price of polyester will continue to decline.

From the perspective of the current PTA industry chain, the recent macro negative news has repeatedly come to the conclusion that WTI crude oil is likely to fall easily in the near future. Suppliers everywhere are not optimistic about the trend of PX in the near future. PTA costs support collapse, and the peak of expansion will usher in the coming months.

As a result, the fundamentals of PTA gathered in bad shape, and in May 31st, when the 7844 lowest point was easily broken down, the central line went deeper and the target below 7000.