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China PTA Futures Weekly Report (January 07, 2019)

Fang submitted 2019-01-07 13:02:38


This weekly report is provided by Galaxy Futures on Monday morning, Beijing time. The data sources are INE, DCE, CZC, CME, ICE, and various news sources.

Please note:

1. Volume, Open Interest and turnover include buy and sell (double-side counted); 2. Volume and Open Interest are measured in lots;

3. Turnover (notional value) is measured in 10,000 yuan(RMB);

4. Price is daily/weekly last trading price.

PTA (Pure Terephthalic Acid)

Part A: Review (2019/1/2-2019/1/4)

From January 2, 2019 to January 4, 2019:the closing price of the main contract (TA905 contract) of PTA futures on Friday was 5834 yuan, 194 yuan higher than the closing price of the last trading day of last week. The highest price for this week is 5854 yuan, and the lowest point is 5560 yuan.

This week (2019/1/2-2019/1/4), the total volume of the main contract was 5,555,486 lots, a decrease of 4,908,938 lots from last week. After the close of trading this Friday, the open interest of the main contract was 955,244 lots, a decrease of 106,454 lots from the last trading day of last week.

6,165,756 lots of China PTA futures were traded during 1/2/2019 to 1/4/2019, and the weekly turnover (notional value) was 174,991 million yuan (RMB), approximately $25.50 billion. The average daily trading volume for the current week was 2,055,252 lots/day.

Part B: Market Dynamics

1. PX capacity will enter the peak period

Based on the current PTA production capacity, the demand for PX is about 32 million tons, while the current domestic production capacity is about 14 million tons. From January to November 2018, the PTA output was 35.37 million tons, and the actual demand for PX was 23.17 million tons. The domestic PX output was 10.7 million tons, and the external dependence was about 57%.

In 2019-2021, the new capacity of China's PX will show a blowout growth, and the new capacity may reach 18.7 million tons. The supply and demand of PX in Asia will usher in a new pattern. China's PX high import dependence will be reversed, and the profit of PTA industry chain will shift from upstream to middle and downstream. PX plants of Hengli Petrochemical, Zhejiang Petrochemical and Hainan Refinery are expected to be put into operation in 2019.By the end of 2019, China's PX production capacity will reach 23.43 million tons, and the production capacity will increase by 68.20%.

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