PTA Weak Demand Rebound Close To The End

Last week, driven by the rising price of raw materials PX, PTA Futures continue to rebound pattern. As of last Friday, the main contract TA1201 closed at 9576 points, an increase of 2.68% compared with the previous Friday, and the total position decreased by 36630 to 328794.

On the spot side, PTA talked about raising the price center to 9300 - 9350 yuan. Because the price is rising too fast, the buyer is not willing to catch up. However, because the production cost is obviously moving up, the seller's low shipment is also cautious. The author believes that under the constraint of lower demand, the rebound of PTA triggered by cost increase is coming to an end. It is suggested that the market should be closed at the beginning.

On the macro level, the euro zone leaders agreed to give the financial rescue fund (EFSF) a new power to help Greece overcome the debt crisis and prevent the market turmoil from spreading to the entire euro area at an emergency summit held on Thursday. This includes relaxing the lending conditions for Greece, Ireland and Portugal, and new measures to replace the old debt with new debt, which is longer on the voluntary basis and with lower interest rates. But last Saturday, speaker of the house of Representatives, Boehner, decided not to negotiate a deficit reduction agreement with the White House. Last Friday, the Chinese president insisted that the overall level of stabilizing prices should be the primary task of macroeconomic regulation.

In June Do spinning Under the stimulus of a rebound in profits, Yarn output Year-on-year growth of 6.97%, but the output of cloth and clothing decreased by 4.14% and 8.3% respectively. According to the China cotton information network survey, the average available days of yarn stocks in spinning enterprises in June were 35.02 days, 13 days more than in May, and the average days available for grey fabric inventory were 16.65 days, an increase of 4.05 days compared with May. Weak demand makes textile enterprises less willing to catch up when prices of raw materials rise. Starting in August, orders for textile and garment foreign trade in spring and summer will be signed one after another (half a year before signing foreign trade orders). From this year's economic performance in Europe and the United States, it is expected that orders in the second half of this year will be as bleak as in the first half of the year, and the hope of textile and garment industry can only be placed on domestic demand. But in the case of high domestic inflation, consumption will be suppressed and domestic demand growth will continue to slow down.

In addition, there is little room for crude oil to rebound. In the context of crude oil price adjustment, China imported only 19 million 700 thousand tons of crude oil in June, down 11.5% from the same period last year. According to Reuters, China's monthly oil demand rose by 1.1% over the same period last year, the slowest growth rate since April 2009. We believe that China's continued tightening of credit will continue to suppress the real economy, and the growth of oil consumption will slow down, or even the year-on-year decline will not be ruled out. Without China's strong demand, the tight supply and demand situation in the world's crude oil market will be eased, and there will be little room for oil prices to continue to rebound. La Nina weather phenomenon has ended, so the natural disasters such as summer hurricanes in the Gulf of America will also decrease, and the weather premium for crude oil prices will be squeezed this year.

In the second half of the year, the production capacity of PTA was compressed under the background of a large number of new PTA production capacity, and the recent production profit fluctuated below 500 yuan / ton. In the case of crude oil price rebound and sluggish demand, PX has little room for speculation by CNOOC and lacks the cost support brought by PX. The rebound of PTA is not big. On the whole, we believe that the PTA rally is around 9800, suggesting that investors should be more likely to end up in the market and try to vent in the vicinity of 10 thousand.