The Fundamentals Are Empty PTA Is Not Optimistic In The Medium And Long Term

PTA in mid February Price From the high level of 12415 yuan/ton to the downward channel, the current PTA index The cumulative decline of has reached 2866 points or 23.5%, and the futures price has reached an important support level of the 60 week moving average. The author believes that although PTA futures prices have rebounded technically recently, and the rebound target may hit the 20 day moving average, the PTA fundamentals in the second half of the year are empty, and the medium and long-term trend is still not optimistic.

First, PTA supply and demand pattern has changed from tight to loose. PTA at the end of 2010 capacity It reaches 16.36 million tons/year, and the downstream polyester production capacity is 30.57 million tons/year. According to 0.86 tons of PTA required to produce 1 ton of polyester, 30.57 million tons of polyester requires 26.29 million tons of PTA, and the gap between supply and demand is close to 10 million tons. If the difference between the operating rates of upstream and downstream enterprises is taken into account, polyester is calculated at 80% of the operating rate, PTA is calculated at 100% of the operating rate, and the supply and demand gap is about 4 million tons. The domestic supply and the annual import volume of 5.4 million tons of PTA in 2010 make the supply and demand of PTA basically balanced. In 2011, the supply and demand pattern of PTA differed significantly between the first half and the second half of the year, depending on the time when new capacity was put into production. The data shows that PTA's new capacity in 2011 was 4.4 million tons, and the production time was mainly in the second half of 2011. The new polyester production capacity was 5.3 million tons, including 2 million tons of new polyester production capacity in the first half of the year. Although the new capacity of 4.4 million tons of PTA is basically matched with the new capacity of 5.3 million tons of polyester in terms of quantity, from the perspective of the production time of each unit, in the first half of the year, more polyester capacity was put into production while relatively less PTA capacity was put into production, and the supply and demand pattern was tight, but in the second half of the year, the new capacity of PTA will be released centrally, and the tight supply will ease. Recently, it was reported that the two units of Yisheng Petrochemical may be put into production in June and July, and the PTA unit of Sanfangxiang (600370, Guba) is expected to be put into production earlier.

Secondly, there are obstacles in the price transmission of PTA industry chain, and the role of cost support is weakened. In 2010, the profit of PTA factory recovered completely, once reaching more than 3000 yuan/ton, and still remained above 1000 yuan/ton at the end of the year. However, since PTA fell this year, the production profit of the factory has been continuously squeezed, and the role of cost support has been weakening. The author believes that the main reason is that the upstream and downstream price transmission of the industrial chain is not smooth. On the one hand, the price of upstream raw material PX is strong. China has a large gap between supply and demand of PX and a high degree of dependence on foreign countries. In 2011, PX's new capacity is expected to be 1.8 million tons, while PTA's new capacity is 4.4 million tons, and the supply gap of PX's new capacity is 1 million tons. The mismatch between supply and demand of PX and PTA will strongly support the strong price of PX. On the other hand, downstream polyester has limited ability to accept high price PTA. In 2010, the polyester industry witnessed a boom in production and sales. The price of polyester products soared, and some polyester products even made rare profits. For example, the profits of individual polyester films can reach 20000 yuan/ton at most; However, polyester chips, bottle chips, staple fibers and other vulnerable varieties that had been in the past for a long time also went out of the predicament, and the profit of several thousand yuan per ton reappeared. However, with the rise of the forward price and the unreasonable settlement price of the spot contract (increased by 300 – 400 yuan/ton per month), the upstream PTA factory refused to give the profits to the downstream factory, which increased the cost pressure of the downstream polyester factory. At present, chemical fiber factories are relatively resistant to the high settlement price of PTA manufacturers. With the release of 2.8 million tons of new PTA production capacity in Ningbo and Dalian from July to August, PTA factories will intensify competition, and high profits of PTA factories will come to an end.

Finally, the demand of polyester enterprises is getting warmer, but the terminal demand is worrying. From 2010 to 2011, the global polyester consumption will maintain 6% growth. The capacity growth rate of the chemical fiber industry during the "12th Five Year Plan" period is 8%. Considering the centralized release of chemical fiber capacity in 2011, the capacity growth rate will be less than 8% thereafter. However, the development of the terminal textile industry will face a series of uncertainties: first, the high cost of raw materials will increase the operational risk of enterprises; second, the high unemployment rate in developed countries and the high inflation in emerging market countries will restrict the further expansion of international demand; third, the pressure of RMB appreciation will increase the uncertainty of exports, Fourth, domestic inflation pressure may affect the domestic demand for clothing goods. In general, in order to control inflation, the macro policy has been tightened steadily. In this case, the downstream industry of PTA is difficult to recover as soon as possible, and the effective demand is difficult to increase.

To sum up, the author believes that the PTA fundamentals in the second half of the year are empty and not optimistic in the medium and long term.