PTA Enters A Broad Concussion Period

Considering that the current trend of PTA is closely related to international crude oil, the international crude oil is not far from the bottom. At the same time, the PTA fundamentals are still empty, and PTA will gradually enter the broad shocks.

Once crude oil rebounded, PTA is expected to follow the rally.

Investors are advised to set up a stop loss, pay close attention to the trend of crude oil, wait and see or try to buy at bargain prices.

In the second half of 2014,

The main driver of the downward trend is the fall in crude oil.

In order to find out the main driving force of PTA's downward trend in the second half of last year, we analyzed the correlation between PTA and other petrochemical industries and their crude oil, and compared their correlations with gold.

From the beginning of March 2014 to the end of May 2014, when the international crude oil was in a high concussion, PTA had a negative correlation with plastics, polypropylene (PP), gold and cloth oil, and the correlation with NYMEX crude oil was less than 0.3.

It can be speculated that when the international crude oil is in a state of turbulence, the price trend of chemical products, including PTA, is mainly driven by its own fundamentals, such as investment and expansion, overhaul and so on.

From the beginning of June 2014 to the end of January 2015, when the trend of international crude oil declined, the correlation between PTA and plastics, PP, Brent crude oil and NYMEX crude oil exceeded 0.95, but the correlation with gold was less than 0.67.

This shows that the decline in the PTA trend started in the second half of 2014 is not a macro dominated commodity collapse, but an overall decline in the petrochemical market, driven by the decline of the international crude oil as a petrochemical source.

During this period, PTA's own fundamentals were retreated as a secondary factor.

From this, we can preliminarily judge that the price trend of PTA will be affected by its own fundamentals when the international crude oil moves into a concussion situation.

Once the trend of international crude oil rebound, it is expected that chemical products including PTA will be more likely to rebound.

At present,

More recognition of the international crude oil trend of Brent crude oil 40 US dollar diamond bottom view, part of the domestic spot market oil companies and some of the international large oil traders have recently been hoarding oil measures.

At present, Brent crude oil shocks at $48, and there may be limited space below.

However, at present, OPEC has a relatively weak desire to reduce production in order to occupy the share of the crude oil market, which means that domestic crude oil may be in the stage of concussion during this period.

Relatively speaking, the international market recognised the view of crude oil rebound in the second half of the year, but there is still a probability of rebound in the first half of this year, and this rebound is expected to become the main driving force for the PTA rebound.

PTA's fundamentals are now empty.

First, the PTA expansion cycle is still over.

However, the growth rate of PTA capacity expansion in 2015 is expected to slow to around 15%.

Compared with the previous years, the pressure of domestic PTA expansion in 2015 will obviously slow down.

From the current expansion arrangements, the pressure of expansion is mainly concentrated in the first quarter.

In addition, in the first quarter of 2015, two large p-xylene (PX) plants will be put into operation in Asia. One set is located in India, and the design capacity is 2 million tons. This package is scheduled to be put into operation in early 2015. Another set is CICC in Ningbo. The design capacity is 1 million 600 thousand tons, and the plan is put into operation in the first quarter of 2015.

Overall, the PX market in Asia is facing greater pressure to expand production in the first quarter.

There is a certain pressure on the cost of PTA raw materials, while there is still a probability that PX expansion will coincide with the drop in crude oil.

Of course, we think this probability is relatively small.

However, it is gratifying to note that with the expansion of domestic PTA and the PX capacity in Asia, the price of PTA has gone down, since 2014.

The overall profit of enterprises has been improved obviously, so that the PTA price of raw materials can be tolerable.