December PTA Price Oscillation Rebound

Macro face: moderate

Recently, the State Council has adopted a series of measures to curb the rising price trend, but the price of agricultural products in November is still expected to reach a new high.

Song Yu, Goldman Sachs Asia's China macro economist, believes that although regulatory measures help to change market inflation expectations to some extent, direct price controls, such as price limits or requiring companies to record prices, are likely to be ineffective.

For example, in the field of agricultural products, although the autumn harvest is very good this year, the price of grain has been rising recently, which may be influenced by the expectation of high inflation.

Economic data for November will be released on Saturday.

At present, CICC's latest report shows that CPI is expected to rise to 4.8% in November, but it is expected to fall in the first quarter of next year, and the overall inflation situation will be relatively moderate in 2011.

Meanwhile, UBS's latest report also predicts that China's CPI will rise by 5% in November.

Based on the current situation, inflation has become the focus of ministries and local governments at all levels, and new policies and measures have been introduced.

In December 3rd, the Political Bureau of the CPC Central Committee explicitly pointed out that "to implement a proactive fiscal policy and a prudent monetary policy" shows that the policy will shift to "tight money and broad finance".

Lu Zheng commissar, chief economist of Xingye Bank's capital operation center, said that due to considerations of many factors, it is expected that interest rates will be raised again in 7-18 days in December.

After the interest rate increase, unless the open market has a large volume, there will be a possibility of raising the 0.5% to 1% reserve requirement in the year.

International crude oil: long-term rally can be expected, short term is facing technical pressure of US $90.

First of all, there is a gap between supply and demand of crude oil.

In terms of demand, the International Energy Agency's monthly report in November 12th predicted that global crude oil demand will increase by 2 million 340 thousand barrels this year, an increase of 190 thousand barrels compared with the previous estimate, while the global demand for crude oil will increase by 1 million 190 thousand barrels in 2011, down 20 thousand barrels from the previous estimate.

On the supply side, OPEC said in its October meeting that crude oil production will remain unchanged, and 500 thousand barrels per day will be increased in 2011.

Meanwhile, the DOE estimates that the supply of crude oil in non OPEC countries will be reduced by 250 thousand barrels a day, mainly due to the reduction in oil supply in the United States and Russia in 2011.

A global energy outlook report released by the International Energy Agency shows that by 2035, international crude oil demand will reach 99 million barrels per day, an increase of 15 million barrels over 2009.

As demand continues to rise, international oil prices will keep rising.

JP Morgan said in December 2nd that oil prices rose to $120 a barrel in 2012 due to tighter global supply.

Second, the dollar exchange rate is pushing up the price of crude oil.

At the beginning of November, the Federal Reserve decided to implement the second round of quantitative easing policy, lending $600 billion to buy treasury bonds, the dollar exchange rate fell sharply, crude oil futures rose sharply to the highest level in 25 months.

Despite the European sovereign debt crisis reappearing, the US dollar exchange rate continued to rebound strongly to a high level, but the market generally believed that a long term analysis of the new round of quantitative easing policy released by the Fed would basically make the US dollar relatively vulnerable in the next 12 months, and the inflation pressure in the us would push up the price of crude oil and other commodities.

Therefore, judging from the long-term trend, it is imperative for crude oil to break through 90 US dollars per barrel to enter the high price range. However, the short line is facing technical pressure at the US $90 line, and oil prices may oscillate.

Judging from the upstream situation, PX price is stable above 1200 US dollars / ton, and PTA production cost is forming a new platform above 8000 yuan / ton.

Under normal circumstances, the price difference between PTA and naphtha is acceptable at the $350 / tonne line. At present, the difference between them is $460 / ton, and the profit margin is 100 USD / tonne.

In comparison, PTA manufacturers have higher profits.

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At the same time, because the PX device is mostly integrated device, the start-up of refinery to a large extent determines the supply of PX.

In the near future, the operation rate of American refineries is still low, and the market supply of PX is still relatively insufficient, which provides support for the firm price of PX.

In addition, Sinopec's PX settlement price in November was issued at 10150 yuan / ton, up 1250 yuan / ton compared with October settlement; Japan oil December PX Asian contract price was 1320 USD / ton CFR; Japan's emerging industry and ExxonMobil December Asian PX contract price was 1350 USD / ton.

PX quotation continues to be strong, cost support will continue to play a role in the PTA price trend.

Downstream, the terminal textile industry has gradually shifted to the off-season, and the execution of orders is coming to an end at the end of the year.

Polyester prices gradually returned to a reasonable level after last week's crazily.

Specifically, the price of polyester staple fiber has been greatly reduced due to the fall of the national control measures and the decline of cotton futures market. At present, the price level has fallen back to the original position before the price rises. However, due to inertia, the price may still drop, but it has basically returned to a reasonable level, that is, the decline should be limited and the market outlook should be limited.

Polyester market, from the current trend, although polyester raw material market has temporary stability signs, but the downstream weaving and firing rate continues to decline, polyester market panic has increased, the market purchasing strength is weak, and polyester factory inventory pressure is also continuing to rise, after market polyester market pressure is still under certain pressure.

However, what we should pay attention to is that, in view of the current situation of cotton shortage, the state has explicitly requested that chemical fiber enterprises increase market supply, and the textile industry will not be weak in the off-season.

In November 29th, the Ministry of industry and Commerce issued a circular calling for the maintenance of stable industrial production order. We should continue to help enterprises expand the supply channels of textile raw materials, and encourage chemical fiber enterprises to accelerate production and increase supply so as to make up for the shortage of cotton.

To sum up, before the announcement of economic data this weekend, the market is under the pressure of increasing interest rates. However, with the digestion of this short-term negative impact, under the background of moderate inflation, with the strengthening of crude oil and the stabilization of PX prices, the downtrend of the PTA market is limited.

From the technical point of view, there are 9000 integral gates and 60 day moving average double supports under the PTA price.

In short, the possibility of PTA price oscillation will rebound in December, which should be based on bargain buying.