PX Is Weak And PTA Costs Collapse.

Recently, the US dollar continued to strengthen, WTI crude oil fell below 80 US dollars / barrel platform, and commodities reappeared weak.

As the most vulnerable species in chemical futures, PTA's main contract quickly fell below the low of 5502 yuan / tonne in mid October, and is now dropping to 5300 yuan / ton.

Looking at the PTA industry chain, cost down and supply easing are two main factors.

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Dragging down, most of the petrochemical intermediate products prices moved down rapidly.

PX has fallen significantly in the past month, and FOB Korean spot price has fallen directly from the US $1000 / ton mark near the end of September to US $1200 / tonne.

In addition to the impact of falling crude oil, the weakness is enormous.

It is also an important reason.

Although the price of PX has dropped recently, the operation rate of Asian PX devices has hardly been adjusted, and the PX market is facing a high inventory problem.

In September, the import volume of PX in China has historically broken through the 1 million tons mark, reaching 1 million 6 thousand tons, adding more pressure to the fragile PX market.

From the profit situation, as the price of PX falls, PX production profit is compressed.

In November, PX and stone naphtha oil price dropped to below US $300 / tonne. It has entered a deficit state, but the loss is not large, and the loss time is not long, so the power of suppliers to reduce production substantially is not large.

The failure of the US $1000 / ton mark also greatly undermined market confidence, and the cost of PTA continued to move down to suppress PTA futures prices.

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According to the latest global cotton supply and demand data from the US Department of agriculture (USDA), the supply volume of the global cotton market in will be further narrowed than that in 2013/2014, and the supply and demand will change in a favorable direction. However, the overall supply is still oversupply, with an excess of 1 million 239 thousand tons, far below the 2 million 436 thousand tons in 2013/2014.

However, global inventory data in 2014/2015 have been rising steeply all the time. Even if China's inventory data are excluded, the expected end inventory and inventory consumption ratio of 2014/2015 will remain high.

In China, according to the data predicted by USDA, the supply and demand pattern of cotton in 2014/2015 is still showing an excess supply pattern, but the surplus has narrowed down from 2 million 694 thousand tons in 2013/2014 to a shortage of 109 thousand tons.

In terms of end inventory, although 2014/2015 has been reduced by 120 thousand tons over the previous year, it is still a huge volume of 13 million 533 thousand tons, far exceeding cotton consumption in one year.

Based on the data of China's cotton reserves in recent years, China's cotton reserve stock is estimated at 9 million 376 thousand tons, which is enough to meet the cotton consumption demand in 2014/2015.

Therefore, high inventory will continue to restrict the uplink of China's cotton price operation.