PTA Futures International Speed-up Polyester Industry Chain Will Welcome Good

On the afternoon of September 2, the PTA sub-forum of China (Zhengzhou) International Futures Forum 2019 was held in Zhengzhou International Convention and Exhibition Center. At the PTA sub-forum, we learned that the PTA futures market has been running well since its internationalization, which not only facilitates the related enterprises to avoid risks, but also provides a reference for the pricing of spot trade. Based on this, the responsible person of Zhengzhou Commodity Exchange (hereinafter referred to as "Zhengzhou Business Exchange") said that the next step would be to vigorously promote the R&D and listing of staple fiber, bottle flakes, PX and other industrial chain varieties, create polyesterindustrial chain futures varieties plate, to help the stable operation of the polyester industry.

Zhengzhou Merchants Exchange PTA futures began to introduce foreign traders. PTA futures is the first chemical product in China's futures market, and the first chemical product to introduce foreign traders. It is also the third international futures product after crude oil and iron ore futures. It is an important step forward in the opening up of China's futures market.

Reporters learned in the sub-forum that since the internationalization of PTA futures, 115 overseas customers have opened accounts, and their positions have exceeded 10,000 hands. In addition, 29 overseas brokerage agencies have completed the filing and can carry out overseas brokerage business of PTA futures.

Xu Junting, deputy general manager of the financial institutions Department of the head office of Communications Bank, said that the international trade volume of the upstream and downstream products of the PTA industry chain is large, and the main trading countries are distributed along the "one belt and one road" line. With the internationalization of RMB and the opening of futures market, PTA futures have been introduced to foreign traders to further promote China to become the pricing center of global polyester products and enhance its international influence.

Zheng Shang Institute's relevant leaders said at the sub-forum that the current PTA futures function played well. In terms of price discovery, PTA futures price has become the pricing benchmark of spot trade. Futures price plus discount is widely used to determine the trade price in the industry. For many years, the correlation of spot price of PTA futures has been over 0.90. In terms of risk aversion, the breadth and depth of industrial enterprises'participation in PTA futures has further increased. From January to August, the holdings of PTA futures corporate customers accounted for 62%. Enterprises in industrial chain use PTA futures tools to avoid risks in a flexible and diverse manner, such as point-to-price trading, warehouse receipt financing, agent processing, capacity pre-sale and arbitrage.

PTA futures market continues to enhance the ability of serving entities. In the functional evaluation of domestic futures varieties in the first half of 2019, PTA futures ranked first in chemical products.

Polyester Industry Chain will benefit well

This sub-forum will build a communication platform for domestic and foreign enterprises. The conference attracted many upstream and downstream enterprises of PTA industry chain at home and abroad, including British Petroleum (BP), Italian GSI, Pakistan ICI and Canon Cocoa, and other foreign production and trade enterprises and leading domestic enterprises. During the period of development, domestic and foreign enterprises have conducted in-depth exchanges on spot trade cooperation.

An insider told reporters that any variety used to be counted as a boom or non-boom cycle of an industry for three to five years. If the second half of 2016 is regarded as the starting point of the boom cycle of the industry, the PTA market has only entered the starting point. The environmental protection policy of the country and the change of retail mode now make the polyester industry cycle extend from 3 to 5 years to 5 to 7 years, so the whole industry is only in the early stage of the boom cycle. For the overall expectation of next year's market, PTA is still a more desirable product in the whole industry chain.

Looking forward to the future, the head of Zheng Shang Institute said that the next step Zheng Shang Institute will focus on five aspects and continue to maintain the healthy development of the polyester industry chain. First, we will vigorously promote the R&D and listing of staple fibre, bottle flakes, PX and other industrial chain varieties, create a futures variety plate of the polyester industrial chain, and help the stable operation of the polyester industry. The second is to innovate business model. Recently, public ETF products linked to Zheng Shang's Capability Commodity Index have been approved, which will enrich the way for investors to participate in commodity futures market. Third, accelerate the listing of PTA options to meet the individual and diverse risk management needs of real enterprises. Fourthly, we should continue to develop industrial base construction, strengthen market cultivation, and improve the level of enterprise risk management. Fifthly, we should steadily promote the introduction of PTA futures to overseas traders, support futures companies to organize promotional meetings abroad, and increase efforts to serve the global polyester industry.