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 (2019/1/14-2019/1/18)

From January 14, 2019 to January 18, 2019:the closing price of the main contract (TA905 contract) of PTA futures on Friday was 6232 yuan, 186 yuan higher than the closing price of the last trading day of last week. The highest price for this week is 6242 yuan, and the lowest point is 5972 yuan.

This week (2019/1/14-2019/1/18), the total volume of the main contract was 9,731,962 lots, a decrease of 271,466 lots from last week. After the close of trading this Friday, the open interest of the main contract was 1,042,040 lots, an increase of 30,726 lots from the last trading day of last week.

10,649,540 lots of China PTA futures were traded during 1/14/2019 to 1/18/2019, and the weekly turnover (notional value) was 322,825 million yuan (RMB), approximately $47.54 billion. The average daily trading volume for the current week was 2,129,908 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：

Part B: Market Dynamics

2019 is the peak period for PX production. The newly added PX capacity in China is conservatively estimated at about 5.5 million tons/year, and the capacity growth rate will reach 37.3%.

In terms of crude oil, the growth rate of global crude oil demand may further slow down due to trade problems and emerging market risks. OPEC+ once again decided to cut production, and still can't change the expectation of oversupply of crude oil. Judging from the reports of the three major institutions, the surplus of crude oil in the first half of next year is more obvious, and the overall pressure has increased compared with this year. It is expected that the international oil price center will move down this year in 2019, putting pressure on the cost side of PTA.

Overall, there is little contradiction between PTA supply and demand next year, but the weak end of the cost will drag down the PTA price. It is estimated that the annual price operation range is 5300-6600, but if there is an emergency that leads to extreme market conditions, it will not rule out that the price high point will reach 7000 or above.

Copyright by Fangquant.com