Price trend

According to the Commodity Market Analysis System of SunSirs, the domestic PTA market remained volatile and adjusted to be weaker this week (August 19-23). The average spot price of PTA in East China was 5,335 RMB/ton, a decrease of 2.04% from the beginning of the week. Insufficient cost support, coupled with an expected increase in accumulated inventory, was negative for the PTA market.

Analysis review

Two sets of PTA plants with a total capacity of 5 million tons in the East China region were briefly shut down last weekend and resumed gradually this week. A 1 million ton PTA plant in Southwest China was scheduled to restart on August 24th. The operating rate of the domestic industry was around 86%, and the later announced PTA plant maintenance plan was limited. The market was concerned about the accelerated accumulation of PTA inventory.

On the cost side, concerns about the crude oil market, economy, and demand continued to exert pressure, but the trend of US oil destocking and the interference expectations of oil producing countries for the continuous decline in oil prices, as well as the impact of geopolitical risk factors, caused crude oil prices to stabilize and rebound slightly. As of August 23rd, the operating load of PX continued to be at a high level, but some PX factories had plans to shut down in September. At the same time, the increase in crude oil drive had provided some support for PX prices.

On the demand side, downstream polyester factories temporarily had no plans to shut down or reduce production of large facilities. The industry's operating capacity remained around 83%, and there was limited room for improvement in operating capacity. Therefore, the demand for PTA remained weak. The peak season for traditional terminal demand was approaching. If demand rebounds as expected, it can boost confidence in the textile market and drive procurement enthusiasm. As of August 23rd, most of them maintained a small amount of procurement for essential needs, with only a few downstream feedback showing signs of improvement in order volume. In the future, attention can be paid to the restart of the "Gold September" polyester plant, or there may be a temporary phenomenon of buying at low prices.

Market outlook

SunSirs’ analysts believe that the strengthening and consolidation of crude oil prices still provided support for PTA costs. However, the supply-demand contradiction of PTA was still prominent, and the peak demand season of "Golden September" had not yet been concentrated, and the positive driving force was not obvious at the moment. The market was waiting for the turning point of the peak and off peak seasons. In the short term, PTA prices will continue to adjust to be weaker.

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