PTA Downstream Demand Weakened.

Affected by the global economy and the downward trend of domestic macro-economy, the demand for PTA downstream is weakening this year.

From 1 to November, China's textile and clothing exports amounted to US $256 billion 946 million, down 5.79% from the same period last year.

It is expected that the global economic downturn will continue next year. The most significant depreciation trend of most currencies in Russia, India, Turkey, Brazil and the euro area will not change. This will seriously impact on China's foreign trade exports.

As China enters an aging society, the labor cost advantages of traditional labor intensive textile and garment industry have been lost, and the low-cost textile and garment industry in Southeast Asian countries has continuously occupied China's export market share.

Textile and garment exports will continue to decline irreversible.

Among them, the cash flow of semifinished fiber grade polyester chips, polyester POY, FDY, direct spun short fiber fell sharply, and were all in a deficit from 5 to December.

In addition, the stock of raw materials and manufactured goods in the stage of the whole market plunge is devaluating, and the loss is more serious.

The stock level of polyester filament has been maintained for half a month.

The instability of start-up load has also increased over the past few years.

In the past year, polyester load generally declined in the first quarter due to the Spring Festival, while the polyester load in the three quarter of last year and this year also dropped sharply, forming two obvious load starts in the first half of February and the second half of August.

It is expected that this situation will continue in 2016.

This year, supported by PTA's capacity and all domestic manufacturers' overhaul, PTA's processing fee has increased from about 350 yuan / ton to the average price of 450 yuan / ton.

And the processing fee of 700 yuan / ton lasted less than half a month.

When processing fees fell to around 300 yuan / ton, the market rebounded quickly.

700 yuan / ton

Basically corresponds to the high price of PTA relative price.

The 300 yuan / ton processing fee basically corresponds to the low price of PTA relative price.

In 2016, PTA contract negotiations, the domestic PTA mainstream manufacturers contract goods pricing formula introduced 30% of the cost pricing weight.

The formula is PTA contract goods settlement price =30% (raw material PX cost +620 yuan processing fee) +70%PTA spot average price.

In this formula, the PTA processing fee has been reduced to $620 / ton from the $720 / ton proposed in June 2014.

Other suppliers continue to choose the average price or the self defined settlement price mode. Under the average price mode, the discount rate is generally reduced, and the delivery is also changed to self mention.

Judging from the performance of manufacturers, the slow increase of PTA processing costs has become a trend. But the competition is limited by the competitive pressure and low cost on high cost devices. The processing fee of 700 yuan / ton is still a top in 2016.

In 2016, we can refer to the level of processing cost interval of 300 - 700 yuan / ton as an important basis for judging the relative price of PTA.

What we need to pay attention to in 2016 is that the demand that has been compressed to the level of rigid demand will not deteriorate again.

In addition, in the past two years, as the upstream market continued to plummet, the raw materials in the downstream sectors were generally low inventories, so when to replenishment the downstream is also a focus of demand stage improvement.

From the present

Fundamentally speaking, uncertainty is the cost side.

First, the trend of the upstream oil price is hard to judge accurately.

The two is from the crude oil to the PTA intermediate naphtha -PX link, and the cost pmission is nonlinear.

The most closely related PX link with PTA is in the whole aromatics block, which is affected by other factors such as gasoline and benzene, and has strong self regulation ability. Even under this year's weak market, it can always maintain the lowest processing profit.