PTA hedging under rising prices of energy & chemicals
——Dong Dandan from Guotai Junan Futures

Mrs Dong thinks that crude oil supply is the key factor for its future price. This supply is from exhausting output of traditional oil fields, alternative shale oil and remaining capacity of OPEC. She delivers that in testing shale oil growth, output growth of China and Mexico falls faster in 2016 and Russia and oil producing countries of North Sea will see the similar situation next year. During the period, shale oil supply growth from decrease to increase will test oil price. For OPEC, it has already gained victory in market share scramble with non-OPEC and future balance depends on interior of the organization鈥檚 willingness of regaining oil pricing right or not. As for the crude oil price, she thinks that it may sustain range bound at the bottom and seasonal discipline continues to take effect. 

Speaking of PTA, import and export of PTA becomes balanced now instead of largely depending on net import before, and supply is completely dominated by China. Besides, PTA capacity startup peak has ended in early 2015 in China, and overall industry rapidly enters shakeout stage with market competition and unexpected factors. As for PX, she says PX has supply gap in China, requiring imports a lot, and overseas market plays the dominate role. PX import origins are mainly from Asia. Proportion of East Asia is around 80%, and the next is from Southeast Asia and Middle East. Asian PX capacity exceeds 42 million tons now, and East Asia shares around 70%, staying at around 29.40 million tons. 

Under the circumstance, she concludes that companies need to consider PTA processing fees, perceive industrial change within the industry and avoid overgeneralization. On the other hand, companies need to choose entering and exiting time based on technical analysis. On transactions, companies should build inventory when processing fee is low, and protect inventory value when processing fee is high, giving priority to the former; spot-futures spread and calendar spread also owns reference value. Bull the market when futures premiums decline.