Weekly Report: PTA (Oct.17- Oct.21)

Whole market still concerned about debt crisis in Europe and crude oil and stock market dramatically went down. As a result, PTA futures also slid down this week. Within this week, main force contract 1201 of PTA Futures in ZCE (Zhengzhou Commodity Exchange) closed at 8130 Yuan/ton; decreased 716 Yuan compared with last Friday, down 8.09%.

This week, PTA price slumped in the market. At present, spot price had already dropped below 9000 Yuan and reached the lowest point of this year. Ended by this Friday, the discussions of market price dropped to 8800 Yuan/ton in domestic market; which greatly lost 750 Yuan/ton compared with last Friday, down 7.85%. Taiwan cargo accumulatively decreased 115 dollars to 1120 dollars, down 9.31%.

The crude oil market is in fluctuation and consolidating this week. Ended by this Friday, crude oil November futures closed at 85.3 dollars, up 1.07 dollars compared with the price last Friday. Unsteadiness of the crude oil price will impair the cost of petrochemical and be unbeneficial for the prices. In this week, naphtha price accumulatively decreased 25 dollars to 883 dollars/ton. PX price slumped. Asian PX price dropped 126 dollars/ton to 1462 dollars this week and the decreasing rate reached 7.93%.

For the downstream market, polyester inventories rapidly increased. Among the stocking quantities of all the polyester products, PSF increased to over 7-day and this situation is not to be named with the same period of last year during which time, there was barely any inventory. Storage of PFY increased to 2 or 3 day amount. Judge from specific products, PSF manufacturers decreased the products by 500 Yuan/ton to 12500 Yuan around. Ended by this Friday, the decreasing range of polyester products is among 100-300 Yuan.

To sum up, PTA fundamentals is also weak. Upstream crude oil is weak and vibrating. PX price slumped. Cost effect almost reduced to none. As PTA devices still kept in high running rates and the polyester prices is weak and decreasing in the downstream market; production-marketing even get worse and the stock pressure become more severe. Besides, traditional busy season of the textile and apparels is coming to the end. As a result of the more serious financial matter of the medium and small size companies, whole textile industry entered a freezing situation earlier than before. Moreover, downstream weak consumption will keep restricting the price increase of upstream products. Therefore, the weakness of PTA price will not have great change in a short term.