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Difficult for Chinese PTA futures to bounce back
26 Dec '11
1 min read
2011 is drawing to an end. In the past twelve months, PTA futures prices have been continuously dropping from high levels this year.
This has meant a sudden drop in profit margins for Chinese PTA producers, who continue to post meager profits.
Production of new PTA plants which became operational in 2011 is 4.50 million and new PTA capacity expected to be installed in 2012 is a massive 11 million tons.
This is expected to create a high supply pressure in the market. In face of an increase in market supply, PTA manufacturers can ensure cash flow, only by reducing operating rates.
It may be difficult for Chinese PTA futures to regain lost ground in the future, due to industry competition rising in 2012.
This has meant a sudden drop in profit margins for Chinese PTA producers, who continue to post meager profits.
Production of new PTA plants which became operational in 2011 is 4.50 million and new PTA capacity expected to be installed in 2012 is a massive 11 million tons.
This is expected to create a high supply pressure in the market. In face of an increase in market supply, PTA manufacturers can ensure cash flow, only by reducing operating rates.
It may be difficult for Chinese PTA futures to regain lost ground in the future, due to industry competition rising in 2012.
Fibre2fashion News Desk - China
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