Price trend

Recently, the domestic PTA spot market has seen a slight upward trend. According to the Commodity Market Analysis System of SunSirs, as of December 18th, the average price of PTA in the East China region was 4,814 RMB/ton, an increase of 2.85% from December 9th.

Analysis review

In the second half of November, the PTA pre maintenance equipment will resume operation, but with the current processing fees, there will be less maintenance of the PTA equipment. Yisheng Ningbo's 2.2 million ton PTA plant was shut down on December 9th; Jiaxing Petrochemical's 1.5 million tons underwent maintenance on December 12th. Dushan Energy's 2.7 million ton PTA new plant began trial operation on December 18th. The current industry production is around 86%, and the overall supply in December is relatively loose.

The escalation of geopolitical tensions between Russia and Ukraine has prompted the United States to announce a new round of sanctions against Russia. In addition, OPEC+ may extend its production reduction plan again at its December meeting and may postpone it until the second quarter of next year, which is positive news for international oil prices. However, the weak demand in the international crude oil market and investors' concerns about the prospect of oversupply in the crude oil market still exist, which is bearish for the oil market. As of December 17th, the settlement price of the main contract for WTI crude oil futures in the United States was 69.65 US dollars per barrel, and the settlement price of the main contract for Brent crude oil futures was 73.19 US dollars per barrel.

The centralized replenishment of downstream factories, previously due to the sluggish performance of the entire polyester sector prices, is now showing signs of a rebound in various products driven by raw materials. The inventory level of raw materials for terminal textile enterprises is not high, and there is still some time before the Spring Festival. This round of replenishment is expected to be mostly for pre year orders, and there is still room for replenishment in the later period. In addition, domestic macro policies have released a series of positive signals, including promoting domestic demand, and it has been heard that export orders have performed well.

Market outlook

SunSirs’ analysis believes that under the current macro positive policies and short-term favorable crude oil conditions, PTA may be boosted in the short term, but the sustainability of demand side replenishment needs attention.

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