Textile And Clothing Consumption Will Be In The Off-Season Until PTA Is In Overcapacity.

PTA is in a period of overcapacity. Some of the devices which are not competitive, such as Peng Wei petrochemical, Liaoyang petrochemical and other devices, will stop for a long time. Yisheng Ningbo and Zhuhai BP will close the small device and choose a competitive large device.

Although Far East petrochemical and Xiang Lu petrochemical plant have long been parking, the pressure of PTA overcapacity has been greatly relieved, but supply is still abundant. PTA has been trapped in the quagmire of overcapacity, and prices have been consolidated at low levels.

It is also reported that Hua Bin Petrochemical (original Far East petrochemical) and Xiang Lu Petrochemical may restart some devices in 2017, and Peng Wei Petrochemical is also likely to be reopened by the end of this year.

If these three sets of devices are restarted on schedule, the pressure of PTA supply will increase significantly, and the competition will become more intense.

Since October, the PTA market has been warming up on the one hand.

Low inventory and high start-up cost support PTA price; on the other hand, the PTA of long pan is favored by funds in the atmosphere of rising external commodity prices.

I believe that although the recent rise in oil prices, PTA prices rose high, but the middle and long lines to see PTA is still under pressure, especially in the news that several sets of long-term parking devices have been able to restart again, if the restart is successful, PTA will once again fall into an excess of quagmire, prices will inevitably fall.

Last week, OPEC finally reached its first reduction agreement in 8 years, and its production cut exceeded expectations.

The 14 main oil producing countries of OPEC agreed to reduce the daily oil production by 1 million 200 thousand barrels, set the total oil production ceiling of OPEC countries to 32 million 500 thousand barrels, and OPEC tended to extend the implementation period of the production reduction agreement for another 6 months.

Meanwhile, the chairman of OPEC said that important non OPEC oil producing countries also agreed to cut production and total production by 600 thousand barrels / day.

Among them, Russia's reduction in production is about 1/2.

Judging from the history of OPEC reduction in 1999, 2001 and 2008, the joint action of OPEC is conducive to stabilizing the crude oil market. The OPEC and Russia have greater determination to cut production, which has significantly boosted international oil prices, and oil prices rebounded rapidly from around 45 US dollars / barrel at the end of November to near us $52 / barrel.

If oil prices continue to exceed $50 a barrel, the cost advantage of shale oil in the US will be highlighted, and the US oil production is expected to further rise, thereby weakening the impact of OPEC production cuts.

Interest rate hike is also a bad thing in the oil market.

Therefore, short-term oil prices will continue to maintain a strong trend, but continue to increase upward resistance.

Affected by crude oil, the price of naphtha and PX rose sharply last week, leading to the shift of PTA cost center of gravity and the emergence of cost push.

In addition, raw material prices stimulate the sale of polyester fibers downstream, and the sales of filament staple fibers have picked up, which has a marked boost to the price of PTA.

However, as the pace of rising oil prices slows down, the role of cost push and demand pull will weaken, and the PTA price action will gradually fail.

If there is no serious compression of profits, the starting rate of polyester industry will remain at a high level in early 12, and rigid demand will continue to support PTA.

However, the early spring festival in 2017 means that textile and garment workers will return home in January. Some enterprises with less orders will start to reduce production before New Year's day, so the terminal consumption will be gradually weakened before and after new year's day.

In recent years, polyester enterprises have been cutting production in the off-season to weaken the sales pressure after the Spring Festival.

Therefore, the polyester plant will be cut down in January 2017.

Falling demand will reduce prices gradually.

To sum up, the short-term PTA price has maintained a strong trend due to the resonance of cost push and warmer demand.

However, in the medium term, crude oil continues to drag upward, and downstream textile and apparel consumption is coming down. The seasonal reduction of polyester production will also be gradually reflected in January 2017. Weakening demand will make PTA rise and power failure. In the long run, the problem of overcapacity has not been solved, and even some parking devices restart will aggravate market competition, industry or usher in a new round of shuffle, PTA price or another fall.

Therefore, it is expected that PTA will not have the power to keep rising. We should pay close attention to the restart of the device and cautiously catch up with it.

For more information, please pay attention to the world clothing shoes and hats net report.