The Vulnerable Structure Of The Chemical Fiber Industry Is Hard To Change In The Short Term.

We believe that in the face of the serious overcapacity, the collapse of crude oil caused by the collapse of crude oil and the collapse of the "three mountains" of cotton, the weak structure of the whole chemical fiber industry will hardly change in the short term. We believe that the recent rise of PTA futures is mainly caused by the rebound of crude oil, considering that the crude oil does not have upward kinetic energy. The rise of PTA still needs to be treated with a rebound attitude, and it should not be overestimated.

Before 2011, due to domestic

Demand growth is increasing sharply every year, while domestic PTA self-sufficiency rate is not high, and the profits of PTA production enterprises are at a high level.

After attracting huge profits, a large number of PTA devices began to mount, but with the global economic slowdown and the manufacturing industry moving to Southeast Asia, the PTA industry turned from oversupply to oversupply.

At present, more than half of the world's PTA capacity is concentrated in China, and the chemical fiber industry has serious excess capacity.

Before 2011, the average load of PTA production enterprises was over 80%, or even at a high level of 90%, but with the increase of production capacity, the load of PTA enterprises is about 70%. The limited production and insurance prices can only cause short supply in the short term. It is difficult to fundamentally change the situation of PTA excess production capacity. Overcapacity can only be achieved through eliminating backward production capacity and inter industry competition, which requires a long process.

"Second big mountains" -- weakness of crude oil

The rise of tight oil has greatly increased global crude oil supply, and due to the global economic slowdown, the growth rate of crude oil demand is far below the growth rate of crude oil supply, resulting in the global supply and demand balance of crude oil being broken and crude oil prices falling sharply.

With the huge increase in crude oil production, the world's oil producing countries will not take the lead in reducing their output. The problem of global crude oil supply surplus is difficult to solve in a short time. This determines that crude oil decline is difficult to change in the short term, and chemical products are affected by the cost collapse, and the price center of gravity moves down.

In the short term, crude oil is expected to stabilise during the peak season of consumption, but it still does not have a large upward space. Therefore, cost support has limited support for PTA.

In addition, due to the sharp decline in crude oil, downstream enterprises

The market outlook is more pessimistic. Driven by the spirit of buying up or not buying, the willingness to replenish the Treasury is not strong. The panic caused by falling crude oil has even suppressed demand.

"Three big mountains" - Cotton fall

In order to make the price of cotton marketization, the state will continue to receive direct subsidy policy for several years.

With the return of domestic and foreign cotton prices, domestic cotton prices fell sharply, cotton prices fell from last year 18500 yuan / ton to the current 13000 yuan / ton, or 29.73%.

As cotton and PTA are mainly used as textile raw materials, the decline of cotton prices has been a drag on the price of PTA, as the alternatives have risen and fallen.

We believe that there are three main reasons for the current PTA price drop: first, the overcapacity of the PTA industry determines that the price of PTA is in a big downward trend; secondly, the collapse of the price caused by the collapse of the crude oil makes the price center of PTA move downward; finally, the price of cotton flower continues to fall, which further occupies the PTA demand.

On the premise that these three negative factors have not been fundamentally improved, the PTA price is hard to form an effective rise. Even if it is affected by the limited production price or the impact of macroeconomic data, it should be treated with a short-term rebound. The height of the rebound is about 4800 yuan / ton, and it can continue to operate in blank until the target position is rebounded.