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PTA price effect the textile price
- Sep 04, 2017 -

PTA price rebounded after hitting bottom low, rising more than 20% in 35 days. Since early May, more PTA plants entered into overhauling period after being lost in high deficit and their capacity utilization rate dropped to 62% from 87%. Meanwhile, three major PTA suppliers changed the clearing form of contract goods and reduced the supply of contract goods to downstream polyester producers, causing the shortage of spot goods. The price of PTA rebounded from three-year low by more than 20% within 35 days. Meanwhile, the price of PX kept increasing, as a result, PTA producers may extend the period of low production, so the situation of supply shortage will not change in short term. However, since the demand of downstream textile producers remains weak, it is hard for polyester producers to transfer the cost pressure downward, therefore, the chance for price falling is big.

Under various negative factors such as weak demand, high price difference of cotton between home and abroad, large quantity of imported yarn, surplus chemical fiber production capacity and capital shortage of enterprises, the prospects of textile industry remain gloomy, Xia Ting, analyzer of SunSirs said. At present, the favorable factors for PTA production chain remain unchanged, it will continue to maintain a strong market in the first half of July, but as cost support becomes weakened, the unbalance between supply and demand intensified and traditional flat season for textile industry comes, the prices of PTA and related products may decline in late July.

It is predicted that, supported by stronger demand in the boom season of September and October, the prices will stop declining and become stable. From the end of the fourth quarter to early next year, the prices will go down once again due to low operation rate and high inventory of raw materials of downstream enterprises. SunSirs predicts the textile index will further increase 10 points in July, then drop back to 980 points in late July, fluctuate around 970 – 980 points in September–October and tumble to 940 points in the late half of the fourth quarter.