Fiber: Cost and Demand Trend Is Expected To Double Support PTA Optimistic

Short the futures market after the New Year atmosphere of intense, frequent bad policy to guide the rapid decline of all commodity prices, the international market of crude oil plummeted, the dollar rose, also makes the domestic price of chemicals once landed on the front platform. The PTA is concerned, the impact of the traditional low season, plus the cost of supporting weaker upstream price callback rate increase.

Lunar New Year holiday, after the price dropped to relatively low, PTA appeared bottoms market, announced the preliminary ruling in the anti-dumping policy promulgated in March under the action of expect good demand, PTA began to rebound. In the market, the central bank to tighten credit is generally considered a rate hike ahead of the background signal, I believe that the recovery in the economy had stabilized, the Government will continue to stimulate economic policy-oriented. In addition, scholars from the relevant judgments of the CPI in 2010 can also be seen that the current inflation expectations continue to increase in expected full year 2010 CPI will show a "two low, intermediate high" pattern. Price increases late last year started, prices steadily higher, all this shows that inflation is a step by step to promote higher commodity prices.

Comparison chart can be seen from the above, one PTA and PX correlation is very large, second, the last two years in March -7 PTA prices showed upward trend during the month, and this period is also to restore domestic demand an important downstream textile stage. In the 2008 financial crisis, in 2009 mainly out of the crisis as economic fundamentals, the first half of 2010, focus on economic recovery, the financial environment on commodity market trends played a good supporting role.

In December 2009 from the Ministry of Commerce began an investigation originating in South Korea and Thailand imported PTA, one year, on February 2 this year, recently announced the preliminary ruling issued, with bond measures in the form of implementation of the provisional anti-dumping. 2009, China's imports from the PTA the two countries for 50% of total imports, once the dumping ruling establishment, the domestic spot market price of PTA will face the problem of rising costs.

Previously, leading to the end of last year, the PTA not fall up the cost factor has plagued many downstream firms, the introduction of this policy will undoubtedly further raise prices. China's crude oil import dependency at this stage more than 50%, while the PTA is mainly affected by the cost of international crude oil prices, in January under the influence of the stronger dollar, crude oil deep edge lower, to some extent alleviated the pressure on the cost of PTA, however, Polyester in the off-season sales as lower back, lower stocking polyester business initiative reduced the price can not be effectively supported. As a result of a strike by French refinery workers and oil stocks continued to fall, fell to 70 dollars pre / barrel mark for crude oil gained some support in the technical basis for the better still, a substantial rise in inverse correlation with the U.S. dollar began to weaken. So I think that festival with the external environment of the double impact of rising crude oil prices will continue to promote the PTA.

The cost factors, the most important thing is PX price, from New Year's Day since 2010, PX prices show downward trend. The figure can be seen from the last two years, PX prices dropped sharply at first and then steady recovery process, and close to prices in 1000 U.S. dollars is relatively stable. Caused the price decline is mainly due to overcapacity in the market for PX concerns, from the domestic market in context, the current capacity expansion is to improve self-sufficiency rate of the domestic market, there is no surplus at this stage concerns, and PX production mainly relies on imported crude oil, so back to the late PX prices likely to top 1,000 U.S. dollars.

Demand for textiles from the terminal point of view, the economy started to recover after the crisis countries in 2009, the domestic textile industry has maintained steady growth, demand is expected to further enhance the post. In 2009 the output of chemical fiber and polyester are up about 15%, we can see that the textile industry has started to recover. In addition, the consumption of the upcoming season, the Spring Festival starts after the PTA general increased demand will also increase, thus driving prices up.

In summary, I believe that the market will steadily increase during the first half PTA main trend of the recent cost and demand is expected to double the backing, is expected to exceed previous highs, the late positive trend bullish.

Here 'I' refers to the Author himself.