Demand For PTA In The Second Half Of The Year: Overall, Not Optimistic.

In China, PTA is basically used for the production of polyester, of which 80% of the polyester is eventually pformed into textile and apparel.

In Asia and China, polyester production capacity is surplus, so to a certain extent, our country's

Since the end of June, the central bank has reinvested in enterprises, and the US dollar has fallen to 6.7800 against the renminbi.

According to the central bank's original statement, "the RMB exchange rate is not adjusted once and for all, and the RMB exchange rate is basically stable at a reasonable and balanced level."

The information disclosed by the central bank is that the renminbi will fluctuate in a small and limited way, but the key is that the central bank has not given a specific degree of stability.

If the fluctuation of RMB is within a range of 2% to 3%, and it is bidirectional, the impact on the external demand of PTA's terminal textile and clothing should be limited.

However, we note that in order to realize its huge export plan, the United States is not satisfied with the current appreciation rate of RMB, but still knocks on different occasions to remind the Chinese government to speed up the appreciation of RMB.

In addition, China's exports increased substantially in the first half of 2010, and textile and clothing accounted for a large proportion, which easily led to various trade frictions.

In fact, since the outbreak of the economic crisis, the trade friction of our government has increased significantly, so the pressure of RMB appreciation is very high.

Once the RMB appreciation rate exceeds 3% in the second half of the year, the attack on many export oriented textile and garment enterprises will be fatal. The export textile and garment enterprises that are expected to be around 20% will be closed down.

At the same time, the European and American replenishment stage has ended. In the second half of 2010, if the global economy does not improve significantly, textile and garment exports will be hard to maintain the current high growth rate.

According to the latest world economic outlook / global financial stability report released by IMF, IMF has raised the global economic growth from 4.2% to 4.6%, but at the same time stressed that the risk and the growth rate in the second half of this year will obviously slow down.

The Federal Reserve of the United States released the latest economic (310358, fund) forecast data on the 14 Eastern time of the United States. It has downgraded the US's growth forecast for the first time in more than a year, and has also raised the expected unemployment rate this year.

From this point of view, the US economy is likely to slow down in the second half of the year, so on the whole, the growth of external demand for textile and clothing is likely to decline in the second half of 2010, but the market is expected to decline after the three quarter.

Next, let's take a look at the domestic demand of textile and clothing.

In recent years, we have benefited from the steady growth of China's economy and the steady increase of disposable income of residents. The domestic demand of textile and clothing in China has shown steady growth. Even the economic crisis of 2008 has little effect on domestic demand of textile and clothing.

We have noticed that in 2009, China announced that it would promote the movement of urbanization. The market generally believed that urbanization would increase the demand for domestic textile and clothing, because the consumption power of urban residents in China is far greater than that of rural consumption.

However, a problem that can not be ignored is that China's urban fixed population plus floating population has accounted for more than 4 of the total population of the country. The urban housing price is still at a high level, and there is no obvious decline.

Another problem is that most of the provinces and cities nationwide have raised the minimum wage level substantially this year, with an average increase of 20% in the whole country. Theoretically, this will increase the disposable income of some residents, which is conducive to the increase of domestic demand for textile and clothing. However, it is also reported that the actual wage increase of the coastal front-line workers is less and the increase is limited.

Basically speaking, the increase in domestic demand for textile and clothing depends on economic growth in the second half of the year. If China's economic growth slows down in the second half of the year, the growth of domestic textile and clothing demand is likely to follow a slowdown.

The latest data show that China's economy grew by 10.3% in the second quarter, the year-on-year increase of 11.9% in the first quarter, and the economic growth in the two quarter was less than that in the first quarter. In the first half of the year, China's economy grew by 11.1%.

In addition, the industrial added value in June was 13.7%, significantly lower than the 16.5% increase in May. Data show that China's economic growth slowed down significantly in the two quarter.

In addition, in the first half of 2010, China's securities market fell sharply, and one hundred million of the investors with strong consumption power and most of the basic people were covered. If the stock market did not rebound in the second half of the year, we expected their consumer confidence to be affected.

In addition, since April 2010, China has increased the regulation of the real estate market. Affected by this, the volume of real estate market in China's first and second tier cities has dropped significantly, and affordable housing is hard to make up for the decline in the commercial housing market. If the real estate market is controlled in the second half of this year and the real estate market is still in a low turnover, the demand for indoor textiles will also be affected.

All in all, the demand for PTA in the second half of the year is not very optimistic in general. However, Premier Wen Jiabao also pointed out that we need to stabilize domestic demand and expand domestic demand, so we remain cautious about PTA's autumn demand. At the same time, we suggest that investors should pay more attention to the RMB exchange rate, global economic trend and market expectations.

It should be noted that, along with the decline in PTA prices, the market has partially digested the expected decline in PTA demand.

In addition, the price trend of PTA will continue to be affected by factors such as cost and supply, market funds, and the overall financial environment including A shares.