Price trend

This week (July 22-26), both costs and demand were bearish, resulting in a weakening of PTA prices. According to the Commodity Market Analysis System of SunSirs, as of July 26, the average spot market price in East China was 5,844 RMB/ton, a decrease of 0.97% from the beginning of the week.

Analysis review

On the cost side, the market was generally concerned about weak demand for crude oil, with European and American crude oil futures falling to their lowest level in six weeks, weakening support for PTA costs. As of July 25th, the settlement price of the main contract for WTI crude oil futures in the United States was 78.28 US dollars per barrel, and the settlement price of the main contract for Brent crude oil futures was 82.37 US dollars per barrel.

Downstream polyester production cuts have been implemented, and mainstream filament factories have increased their production cuts and gradually implemented them within the week. In addition, mainstream short fiber factories have also reached an agreement to reduce production by the end of this month, causing market concerns about PTA demand. The polyester industry had a production rate of over 81%, and mainstream short fiber manufacturers plan to reduce production by 10% by the end of this month. In addition, the 200,000 ton polyester filament plant will be shut down at the end of the month. It is expected that polyester production may continue to decline, and PTA demand will maintain a weaker trend.

From the perspective of its own supply side, Yisheng Dalian's 6 million ton plant was temporarily shut down on July 22 and restarted to increase load. Jiatong Energy's 2.5 million ton plant underwent a two-week maintenance on July 25, Pengwei Petrochemical's 900,000 ton plant was shut down on July 25, and Ningbo Taihua's 1.5 million ton plant is scheduled to restart in early August. Overall, the impact of equipment changes on PTA supply was limited, and the supply of goods remained abundant, with an industry operating rate of around 82%.

Market outlook

SunSirs analysts believe that the short-term cost side of the oil market was dominated by mixed long and short news, and there was still room for growth in the PTA supply side. Downstream polyester production may continue to decline, which will weaken the support for PTA demand. Under the lack of favorable guidance from fundamentals, the focus of PTA prices will continue to decline.

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