PTA (Pure Terephthalic Acid)

Part A: Review (2018/12/17-2018/12/21)

From December 17, 2018 to December 21, 2018:the closing price of the main contract (TA905 contract) of PTA futures on Friday was 6018 yuan, 186 yuan lower than the closing price of the last trading day of last week. The highest price for this week is 6294 yuan, and the lowest point is 5938 yuan.

This week (2018/12/17-2018/12/21), the total volume of the main contract was 8,584,772 lots, an increase of 29,632 lots from last week. After the close of trading this Friday, the open interest of the main contract was 1,083,724 lots, an increase of 98,700 lots from the last trading day of last week.

9,517,956 lots of China PTA futures were traded during 12/17/2018 to 12/21/2018, and the weekly turnover (notional value) was 293,049 million yuan (RMB), approximately $42.58 billion. The average daily trading volume for the current week was 1,903,591 lots/day.

Notes: The main contract refers to the futures contract with the maximum open interest. Table:Volume, Open interest and Turnover of PTA futures.

Note:

The last trading day for China PTA futures January 2019 contract (TA901) is January 15th, 2019 and the final delivery date is January 17th, 2019.

Part B: Market Dynamics

1. Spot market price

PX price is 1056 US dollars / ton (-12), equivalent to PTA cost 6276 yuan / ton. PTA spot 6680 yuan / ton (-5), ethylene glycol 5800 yuan / ton (-15). The basis is 464 (+15), and the spot processing spread is 984 (+57).

2. Supply and demand

On the supply side, the operating rate of PTA has increased to 76.9%.

On the demand side, polyester cash flow is not performing well. Since last week, polyester plants have announced maintenance plans, and the polyester plants planned to be overhauled from late December to January involve a total capacity of 4.34 million tons per year. In addition, there are devices that involve 1.4 million tons/year of capacity to restart or start production. Recently, polyester production has fallen sharply, and polyester production load will fall by 1.1% to around 86.6%.

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