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SunSirs: Cost Side Support Was Strengthened, PTA Market Continued to Rise
December 23 2022 13:57:38SunSirs(John)

Price trend

According to the monitoring of SunSirs, the domestic PTA market continued to rise. As of December 22, the average price in the East China market was 5,522 RMB/ton, up 0.35% from the previous day, and up 16.93% year on year.

Analysis review

On the supply side, under the low processing cost, PTA large factories increased their efforts to reduce production. The maintenance time of some plant units was extended, and the shutdown continued in January. As of December 21, the domestic PTA operating rate had dropped to about 66%. In terms of new capacity, a new 2.5 million ton PTA unit of Shandong Weilian Chemical has been put into production, and one of the lines is expected to be opened in the early stage; The 2.5 million tons of Jiatong Energy is currently in trial run. The overall production progress of the device is slightly slower than the previous market expectation.

The fall of the US dollar and the US planed to buy back oil to replenish reserves are good for the oil market; In addition, the US inventory data released on Wednesday showed that the crude oil inventory fell more than expected, and the release of positive news boosted oil prices. International crude oil futures continued to rise. On December 21, the settlement price of the main contract of the U.S. WTI crude oil futures was 78.29 US dollars/barrel, and the settlement price of the main contract of Brent crude oil futures was 82.20 US dollars/barrel.

In the short term, with the easing of the epidemic situation and the replenishment of final orders, the terminal demand has improved marginally. With the opening of the epidemic prevention policy, some terminal enterprises have shown a demand for speculative replenishment, and the procurement of raw materials for weaving enterprises has increased. There were additional production raw materials before the Spring Festival, and there were also some stocks of raw materials at low price for the periods after the Spring Festival. The comprehensive operating rate of Jiangsu and Zhejiang looms rose to more than 52%.

Market outlook

Analysts from SunSirs believe that PTA still has a lot of self maintenance and production reduction, and the overall production progress of new devices is slightly slower than the previous market expectation, so the supply pressure of PTA is not large in the short term. At present, the crude oil performance is relatively strong, and the cost side support is strengthened. However, the demand improvement is not sustainable enough, which will still suppress the rise of PTA price.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com

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