In July, The Price Of PTA Fell By 22%, And The Latter Trend Would Fall Below 5000?

Beginning in July this year, PTA started a "bad year" and entered the downstream channel.

In the first week of July, because of the meeting between heads of state of China and the United States, PTA welcomed the two day limit, followed by the two day limit.

In the second week of July, PTA rose again and then fell back.

In the third week of July, PTA began to "sink and swim" because of the capital side.

At the end of 7, PTA was down again due to the impact of international oil prices and other factors.

As of August 7th closing, PTA futures main contract 1909 closing price of 5148 points, compared with the highest 6612 points in July 3rd dropped 1464 points, the price fell 22%.

Every time you think that the price of PTA has dropped to the bottom, it should rebound, and there will be a magic operation immediately. Then PTA will continue to fall, so that it can not completely grasp its "lower limit".

Why is PTA so "no lower limit"?

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This is a pool of stagnant water.

Since PTA introduced futures, it has been very active in the futures market, and the price volatility of PTA futures is also greatly influenced by capital.

In the past, when the market was good, there was a stir in the market, and once again the funds were hyped up, PTA would easily come up.

This year, the overall market situation of textile industry is not good. Downstream demand for polyester filament is not high. Sales of PTA are not as good as expected, but speculation is still in progress. But the embarrassment is that because of the lack of downstream access, this year's PTA is often just scrambled up, and it will fall soon.

Fundamentally speaking, there was no big change in July and June. Weaving Market is still weak. Most weaving enterprises still worry about order problems.

However, in such a dull market, PTA futures have seen a very large fluctuation. It is only 6 days when the daily limit is down. It is known that excluding the 8 days of the weekend, the futures market will open for 23 days a month, which means that more than 1/4 of the trading days are in a state of rising and falling.

Despite the impact of the first meeting of the US dollar and the oil tanker in Iran, the interviewing companies learned that, for the weaving enterprises and textile foreign trade enterprises, the short-term impact of Sino US trade negotiations is only reflected in the exchange rate fluctuations in the current market situation, which will not affect the order situation in a short time.

In July, the volatility of PTA was so large that in the final analysis, it was still affected by capital.

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Price reduction? The real thing is to earn more and earn less.

PTA is also a very important reason for its abundant profits.

Speaking of PTA now, we all have two points of agreement. First, the supply and demand situation is more intense in the polyester industry chain. The second is that the capacity is mainly concentrated among several large factories. The tight supply and demand shows that there is room for profit, while capacity concentration will enlarge the profit space.

Therefore, a situation has been created: all other links in the polyester industry chain are small profits or losses, and only PTA's processing fee has reached four digits. High processing fee represents a high profit, which naturally shows that the product has enough room for reduction.

Under the combined influence of many adverse news, PTA manufacturers also have to drop the price of the products.

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Production and operation in July

In addition, the excessive production of weaving enterprises is also an important factor.

At the time of June, a holiday notice could be bubbling up in the market, and now, the shutdown seems to have become a common practice for enterprises.

Whether it's down to construction or high temperature holiday, in short, the start-up rate is much lower than the same period in previous years. According to data monitoring of China silk net, the loom rate in Shengze area dropped by more than 10% in July this year.

The lower the raw materials, the less cloth they can sell. The lower the start-up rate, the less people buy raw materials, and the market as a whole is in a vicious circle.

Will PTA fall below 5000?

From the 6612 point to the 5140 point now, where is the "lower limit" of PTA? The author believes that the possibility that PTA will eventually fall below the 5000 point is unlikely, and that it may even re open the upstream channel in the near future.

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RMB "break 7", import raw material cost increase

In addition, PTA's raw material PX still needs to import in the short term. In the first half of 2019, China's PX imports amounted to 7 million 906 thousand tons.

The cost fluctuation of imported raw materials is greatly affected by the exchange rate. In the near future, the RMB exchange rate "breaking 7" is bound to increase the production cost of PTA to a certain extent. If PTA companies want to keep profits, it will be difficult for PTA to continue to fall.

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Profits have been compressed, and there is no further room for further decline.

From the profit point of view, according to the data monitoring of China silk capital network, as of August 6th, the processing fee of PTA has dropped to 313 yuan / ton, down 921 yuan / ton compared with July 22nd.

Although PTA is still in a profitable State, for PTA production enterprises, the profits will drop so much when there are no major changes in the fundamentals.

PTA manufacturers have a high say in the price of PTA, and it is still very easy for them to stabilize the price of PTA when there is no big bad market.

THE END

Although the probability of PTA's rebound will be bigger in the future, this year's PTA has made several "moths". Every time it thinks that it has touched the bottom, it will always fly several "Black Swans" to suppress the price that has just stabilized.

From the present point of view, the growing Sino US trade friction is the biggest uncertainty factor, and how the price of PTA will change in the future, we need to pay attention to its subsequent development.