Weekly Report (Aug. 29- Sept. 2): PTA

The overall price of PTA futures shook to a high level this weak. Ended by Friday, September 02, 2011, main force contract 1201 of PTA futures in ZCE (Zhengzhou Commodity Exchange) closed at 10,016 Yuan/ton, increased by 54 Yuan/ton compared with last Friday, up 0.54%.

From the spot goods aspect, PTA market followed the increasing tendency of last week. In the domestic market, the discussions rushed to 10,250 Yuan/ton this Thursday, while slid to 10,200 Yuan/ton this Friday. PTA price accumulatively increased 200 Yuan/ton compared with last weekend; the increasing rate was 2%. The overseas market is similar with the domestic market. The discussions of Korea and Taiwan cargo increased to 1,310 and 1,290 dollars on Thursday separately, while both slightly dropped 10 dollars on Friday. On the whole, both Taiwan and Korean cargo increased 20 dollars compared with last weekend and the increasing rate was 1.56% and 1.57% respectively.

The crude oil price was mainly increasing this week. Ended by Friday, September 02, 2011, the close price of light crude oil, October futures was 88.93 dollars/bbl, gained 3.63 dollars compared with last Friday, up 4.26%. October futures of Brent oil closed at 114.29 dollars/bbl rose 3.67 dollars, up 3.32% compared with last Friday. The increased of crude oil drove the MX and naphtha to a strong tendency. Asian Heterogeneous MX price increased 34 dollars/ton to 1,355 dollars/ton FOB Korea, the increasing rate was 2.57% and the naphtha price increased 14 dollars to 976 dollars/ton CFR Japan, the increasing rate was 1.46%.

PX price keeps firm and turned strong. Asian PX price accumulatively increased 44 dollars/ton to 1,682 dollars FOB Korea, up 2.69%. European PX price was shaking around 1,596 dollars/ton in the market.

In the downstream market, the polyester products steadily increased in prices. Polyester Bottle Chips price increased to 13,000 Yuan/ton. The semi-dull polyester chips price increased nearly 200 Yuan to 12,600 Yuan/ton. Polyester Stable Fiber slightly increased; among which, Jiangsu-Zhejiang origin, 1.4D semi-dull PSF is quoted up by 100 Yuan/ton to 13,400-13,500 Yuan/ton.

To sum up, recent price of upstream oil and PX continues to strengthen, which gives strong support for PTA cost and makes the key of strong PTA tendency. In the meantime, low inventory and rigid demand brings smooth price transmission and profitable support for PTA. However, global economy obviously slows down and the downstream demand is weak, and the terminal demand faces certain pressure. Therefore, in a short term, PTA price may fluctuate around 10,200 Yuan.