PX Short Fiber Bottle Varieties Are Accelerating The Market, Polyester Industry Chain Futures Will Be "Plate Effect".

The two day came to China's central city, Zhengzhou, with its own traffic, world-renowned big coffee, winner of the Nobel prize in economics in 2018, leader of endogenous growth theory, and Paul M.Romer, Professor of economics at New York University's Stern business school. For a time, his analysis of the global financial market and the world economic situation occupied an important position in China's well-known financial media and information platform.

This is not Paul Romer's first visit to Zhengzhou. In September last year, he had fully perceived the unique charm of Zhengzhou's Central Plains city and the innovative vitality of China's economic and booming China futures market. In fact, attracting Paul Romer to Zhengzhou for two consecutive years is the annual event of the global futures industry - China (Zhengzhou) International Futures forum.


2019 China (Zhengzhou) International Futures forum was held on September 1st ~2 at Zhengzhou International Convention and Exhibition Center. This forum is sponsored by the Zhengzhou Municipal People's government, Zhengzhou commodity exchange and CME Group. The theme is "reform the new situation and open up new steps -- deepen the reform of futures supply side, and serve the high quality development of the economy".


In September 2nd, one of the important sub forums of China's (Zhengzhou) International Futures forum, PTA futures sub forum, was held in 2019. The forum builds a communication platform for domestic and foreign industrial chain enterprises, attracting overseas production and trade enterprises such as BP, Italy GSI, Pakistan ICI and Glencore, as well as the upstream and downstream enterprises of China's polyester and PTA industry leading enterprises.


The guests at home and abroad discussed the internationalization of PTA futures, PTA spot trading cooperation, and how to continue to improve the futures market of polyester industry chain.


PTA Futures: the international market is running well.


PTA is the main raw material for producing polyester, and polyester fiber and fabric are one of the main raw materials for fashion.


PTA futures is the first chemical industry in China's futures market and the first chemical industry to introduce foreign traders.


More than 90% of China's PTA production and trading enterprises, more than 80% of polyester enterprises are currently involved in PTA futures trading, and the proportion of legal person accounts is more than 65%. For many years, the correlation between China's PTA futures price and spot price is as high as 0.99. In November 30, 2018, PTA futures began to introduce foreign traders.


Zheng Shang's responsible person said at the meeting that the current PTA futures function is playing a good role. In terms of price discovery, PTA futures price has become the benchmark price for spot trading. The trade price is generally used in the industry to determine trade prices. The correlation between PTA spot prices has been more than 0.90 for many years. In terms of risk aversion, the breadth and depth of industrial enterprises' participation in PTA futures have increased further. This year, 1~8 PTA accounts for 62% of the clients' positions in the futures market of PTA, and the ways and means to avoid risks in the industry chain enterprises using PTA futures tools are flexible and diverse, such as spot price trading, warehouse receipt financing, agency processing, capacity pre sale and hedging benefits. The ability of PTA futures market to serve the entity business continued to increase. In the first half of 2019, in the domestic futures variety function evaluation, PTA futures rank ranked first among chemical products.


Data show that PTA futures have good liquidity, which provides convenience for relevant enterprises to avoid risks. In the first 8 months of this year, PTA futures totaled 240 million hands (unilateral, the same below), accounting for about 10% of the National Futures market share, and 1 million 470 thousand hands in average daily turnover, an increase of 134% over the same period last year.


In order to promote PTA futures to play a better role and serve related industries, in October 2017, Zheng Shang also launched a continuous active work to promote active contracts in 3, 7 and November. This year 1~8 months, target contracts accounted for 18.3% of the average daily positions, daily average trading volume accounted for 5.6%, the delivery volume accounted for 30%, the market thickness continued to increase, better meeting the needs of industrial customers continuous participation in PTA futures trading delivery.


It is understood that after the introduction of PTA futures into overseas traders, overseas traders are gradually trying to trade after familiarity with domestic futures market rules, rules, systems and participation processes.


Since the internationalization of PTA futures, as of the end of August, a total of 115 overseas customers have opened accounts, and overseas customers have exceeded 10 thousand positions. A total of 29 overseas brokers have completed the record. They can carry out overseas brokerage business of PTA futures, and the market is running well.


Petrochemical polyester industry: green development is the trend of the times


Polyester fiber is the largest raw material for making fabrics, such as garments, toys, home textiles and other textiles.


PTA is a very important petrochemical product and chemical raw material. Its upstream is linked to the PX industry, and downstream is linked to polyester bottle, polyester film and polyester fiber. In the aromatics industry chain, 90% of PX is used to produce PTA, and 90% of PTA is used to produce polyester products. Polyester bottles are widely used in various beverage bottles on the global market. Polyester fiber is the largest raw material for making fabrics, such as garments, toys, home textiles and other textiles. China is currently the world's largest producer and consumer of PTA, and is also the world's largest polyester product, chemical fiber product and textile production base and consumer market. Therefore, the PTA industry is inseparable from upstream oil and its downstream polyester industry.


Director of information and marketing department of China Petroleum and Chemical Industry Federation, Zhu Zhu, said that the investment in chemical raw materials and chemical industry in the first half of this year increased by 9.3% compared with the same period last year. This is a reversal of the industry after 3 years of negative investment growth. It also shows the current market recognition of the industry. However, in the first half of this year, the profits of the petroleum and chemical industry decreased by 18.3% compared with the same period last year, which means that the industry is also facing the pressure of economic slowdown. Under such circumstances, the biggest uncertainty and change this year will come from imports and exports. Crude oil is very important for China's economic development. At present, the biggest resource gap still comes from crude oil.


Zhu further pointed out that the discussion of PTA requires discussion of crude oil. In terms of bulk products, Chinese enterprises are often faced with homogenization of products. There is still a gap between product differentiation and foreign countries, which is greatly influenced by the fluctuation of raw material prices, which is commonly known as "relying on heaven for food". Because the fluctuation of PTA price is closely related to the fluctuation of crude oil prices, he reminded us: "some private chemical fiber enterprises are starting to swim up, but can crude oil get a reasonable price?" Moreover, the added value of products is also greatly affected by the price of crude oil. Therefore, PTA enterprises should pay great attention to the crude oil market. "


Turning to the new development trend of China's petroleum and chemical industry, Zhu said that enterprises should pay attention to technological innovation, not only product technology innovation, but also the innovation of traditional petrochemical industry and intelligent manufacturing. At the same time, enterprises should pay special attention to green development. The downstream of PTA is polyester industry, and there is a trend of "de plasticization" in the world. Therefore, the next step is to further promote green development and consider the impact on the environment when developing.


Francisco Zanchi deeply agrees with the direction of green development in petrochemical and polyester industries. Francisco Zanchi, chief executive officer of GSI company in Italy, has over 40 years of experience in textile, synthetic fiber and polyester industry, and has a deep understanding of PET bottle industry.


Francisco Zanchi, chief executive of GSI company in Italy, pointed out that in 2019, the capacity of the global pet bottle flake was 31 million tons, and the demand was 24 million tons, that is to say, the surplus volume of the global bottle piece was 7 million tons. At present, the global polyester industry is a buyer's market. Under this background, enterprises should think about what should be done, and at the same time, pay attention to the problem of product recovery, so as to use recycled bottles as much as possible.


Francisco Zanchi stressed that although the use of PET will have an impact on the environment, PET products 100% can be recycled. It is even more important to consider how to use PET. For example, we should educate people how to deal with PET, how to use PET, and how to recycle PET.


Francisco Zanchi said that in Europe, the proportion of recycled bottles has reached 55%, and the demand for regenerated flakes in the European market is becoming larger and larger. New European laws and regulations emphasize that the use of recycled flakes will continue to increase in the future.


"Developing green economy and recycling economy is very important. Developing and using regenerated PET is a necessary path in the world. As China implements a more stringent environmental protection act, China's PET producers need to think better about their future development path. I believe China's PET manufacturers will take into account this aspect and increase the capacity of regenerated PET. In fact, Thailand, Vietnam and other countries have begun to focus on the recovery of PET products, and they have some relevant policies in this regard. " Francisco Zanchi said.


Zheng Shang: create polyester industry chain futures variety plate


"China's economic development is facing new risks and challenges, and the downward pressure on domestic economy is increasing. In complex market environment, the importance of risk management through derivatives market is increasing for enterprises, industrial chains and even the whole market. Xu Junting, deputy general manager of the head office of financial institutions of Bank of communications, said at the meeting.


Xu Junting further indicated that PTA futures is a unique futures variety in China. The market has been running smoothly for more than 10 years, and the effect of serving the real economy is remarkable. The international trade volume of upstream and downstream products in the PTA industry chain is large, and the main trading countries are distributed along the "one belt and one road". In the context of RMB internationalization and China's futures market opening to the outside world, PTA futures, as China's third international futures varieties, has successfully introduced overseas investors, which will further promote our country to become the pricing center of global polyester products and enhance the international influence of China's polyester industry. At the same time, this is another important contribution made by Zheng Shang to promote the development of China's economy and futures market and serve the national strategy.


It is also worth the concern of the global polyester industry chain that, at the 2019 China (Zhengzhou) International Futures forum, the relevant official of Zhengshang said that the next step is to vigorously promote the development and listing of the industrial chain varieties such as PET staple fiber, bottle flake, PX and so on. At the same time, Zhengshang will accelerate the listing of PTA options to meet the demand of risk management of personalized and diversified entities. It will continue to steadily push forward the introduction of PTA futures to overseas traders, support Futures Company's holding of overseas promotion and intensify the service of the global polyester industry.


According to another introduction, Zheng Shang will also innovate its business mode next. Recently, the public offering ETF products linked to Zheng's index of commodity index have been approved and will enrich investors' participation in commodity futures market after listing. At the same time, Zhengshang will continue to carry out industrial base construction, increase market cultivation efforts, and enhance enterprise risk management level.


As Chen Huaping, director general of Zheng Shang, said in his speech at the China Zhengzhou international futures forum 2019, "Zheng merchants will thoroughly implement the relevant requirements of structural reform and capital market development of China's financial supply side, adhere to" four awe, one joint effort ", deepen reform and innovation, expand opening to the outside world, strive to improve the quality of market operation, and provide high quality services for the real economy.