Weaker Demand Will Inhibit PTA Rebound

June is the low consumption season of polyester industry chain. With the decline of domestic loom load, the sales pressure of polyester increased, and the polyester operating rate declined.

Last week, data showed that although the price of PTA and glycol increased, polyester polyester prices were limited, and polyester processing margins sharply compressed.

In the past two years, the polyester industry has been able to manage inventory by adjusting the device load actively, so that it can achieve better business performance in complex environment.

It can be assumed that if the price of raw materials is high, but the price of polyester will be difficult to push up due to the weakening of terminal consumption, polyester profits will continue to shrink, which will accelerate the pace of production reduction and the demand for PTA will continue to decline.

The data provided by Wind show that

The overall operating rate has dropped from about 85% to 80%. In 2014, the rate of polyester utilization was lowest to 66%.

Therefore, domestic polyester plant load has continued to decline.

It will weaken or inhibit the uplink of PTA price.

To sum up,

Support, device failure and so on, PTA will remain strong in the short term.

But in the long run, the cost still has downward pressure, and the restart of the failure device will also become a new negative.

At the same time, the consumption of terminal will gradually weaken, PTA demand will continue to decline, and the price space will be limited.

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At present, the cotton ginning mill holds limited lint and is still on the sidelines and continues to support the spot market of lint.

Cotton has entered a rapid growth period recently. Cotton seedlings in North Xinjiang are in the sixth true leaf stage. The plant height is about 30 centimeters, and some cotton seedlings have been buds 2-3. Some cotton in the southern part of Xinjiang are affected by bad weather such as cooling and hail. The cotton seedlings are seriously damaged, some cotton fields are replanted or rebroadcast, and cotton production is affected.

The the Yellow River river basin is clear and sunny in recent days, and the cotton seedling is in the 4-5 true leaf stage. The plant height is about 20 centimeters.

The cotton seedlings in the Yangtze River Valley are in the 5-6 true leaf stage, and the plant height is 20-25 centimeters. However, due to the early rainy weather, some aphids and premature senility are occurring in some cotton fields. Cotton growers are stepping up their field management.

The spot price of domestic lint has been stable in recent years.

As of June 8th, the domestic cotton production area ginning factory 3128 lint factory quotes at 12500-14000 yuan / ton, 4128 lint factory price quoted at 11800-13000 yuan / ton, compared with last week was flat.

According to market participants, the following unfavorable factors still inhibit the spot market of lint:

1, futures weak shocks, did not bring a clear guide to lint spot.

On the 1-5 day of June, the US cotton continued to rise. As of June 4th, the US cotton July contract closed at 65.12 cents per pound, up 0.77 dollars / pound compared with May 28th.

However, due to weak demand, last week, domestic cotton fell stagflation. As of June 5th, Zheng cotton CF1509 contract closed at 13055 yuan / ton, down 65 yuan / ton compared with May 29th, and the futures market is still vulnerable to shocks.

2, the tariff of cotton yarn in India has dropped, which will impact the domestic cotton market.

During the prime minister's visit to China near India, Chinese leaders said they would promote the trade of cotton yarn between China and India, and promised to reduce import tariffs on cotton yarn. Once the tariff of India cotton yarn dropped and no quota quotas were imposed, it would have a greater impact on China's cotton textile industry and cotton industry. In the long run, this would accelerate the closure and closure of small and medium cotton mills, thus affecting the lint market.

3, state reserve stocks are high and demand is weak.

There are more than ten million tons of national cotton storage. There are reports that the state will sell cotton in 2011 and 2012 in June, and the huge cotton stocks will have to worry that the wait-and-see sentiment of textile enterprises will increase, and that it will be kept with buying and buying. "High inventory and low demand" still restrict the cotton market.