Chinese Zhengzhou PTA futures rallied after opening lower and finally closed up slightly on July 19. The most active contract 1009 opened at 6,920 Yuan / ton, to touch a intraday high of 7,066 Yuan / ton while the lowest was 6,920 Yuan / ton and finally closed at 7,036 Yuan / ton, up 54 Yuan or 0.77 percent from July 16.
Under the background of "three highs" of PTA (high-margin, high operating rate, high inventory), the market continues to worry about market situation and tightening foreign trade policy, PTA will mainly base on weak market before the traditional mid-season of textile demand, if oil price does not see sharp rise.
On upstream side, the decline of US consumer confidence adds worries that demand of the world's largest energy consumer may be weaker. On July 19, Asian trade of crude oil futures at New York Mercantile Exchange (NYMEX) fell for the fourth day.
As of Beijing time 15:00, NYMEX August crude oil contract fell US $0.23 to $75.78 / barrel. The US June consumer sentiment index by Reuters / Michigan University fell from 76 in May to 66.5, resulting in drop in oil prices, the index hit the lowest since August 2009.
PTA producers are profitable, so they maintain relatively high operational rate, existing operational rate of PTA is more than 90 percent. PTA shipment from Hengyi Group and Chongqing Pengwei has been affected due to problems at Dalian Port and Chongqing port, which have been closed down.
Yangzi Petrochemical is expected to overhaul its PTA production capacity (1.3 million tons / year) in August. In addition, Xianglu petrochemical plans to overhaul its PTA plant (1.65 million tons / year), but the exact date is yet to be decided.
South Korea's KP Chemical plans to have its PTA production line (600,000 tons / year) under two weeks maintenance in September.
Overall PTA supply will be reduced in July and August, which will boost PTA market. But the industry still maintains higher operational level, as PTA producer enjoy higher profits, therefore, basic supply and demand structure is difficult to change, upward space of market price may be limited.
Asian Paraxylene continued to move up last Friday, FOB Korea closed at US $835.25-836.25 / ton, $7.75 / ton higher from the previous day. CFR Taiwan closed at $850.25-851.25 / ton, up $7.25 / ton.
Offers from sellers for domestic goods were around 7,000 Yuan / ton, actual negotiations focused on 6,900-6,950 Yuan / ton. Offers for Taiwan goods were around $845 / ton, firm offers intended at $840 / ton.
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