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SunSirs: Strong Cost Support, PTA Prices Hit a New High in Nearly 6 Months
April 19 2023 09:50:05SunSirs(John)

Price trend

According to the Commodity Market Analysis System of SunSirs, the domestic PTA spot market has maintained a fluctuating upward trend since early December 2022. As of April 17, the average PTA market price in East China was 6,520 RMB/ton, an increase of 27.47% compared to 5,115 RMB/ton on December 7, 2022, and a new high in the past six months.

Analysis review

The improvement in the supply and demand structure of the cost side PX market was the main reason for this round of increase. The production capacity of PX plants for maintenance at home and abroad was relatively large and the time was relatively concentrated. As of the 18th, the operating rate of PX devices in Asia was at a three-year low, while the domestic device load remained basically below 80%, near the low point in recent years. Moreover, the promotion of new production capacity was not as expected, thus exacerbating the tight supply situation in the PX market. From the data of SunSirs, it can be seen that the price trends of PTA and PX are basically consistent.

Recently, the PTA market saw a slight contraction in supply, with Yizheng Chemical Fiber 1# 350,000 tons/year plant in a state of shutdown, and the total production capacity of Dongying Weilian's plant of 2.5 million tons/year dropping to around 50%.The operating rate of the domestic PTA industry remained around 78%.

Cost support remained, and in the unexpected announcement of production cuts by OPEC+ member countries, the bullish atmosphere in the international crude oil market had heated up, maintaining strong volatility. As of April 17th, the settlement price of the main contract for WTI crude oil futures in the United States was 80.83 US dollars per barrel, while the settlement price of the main contract for Brent crude oil futures was 84.76 US dollars per barrel. At the same time, PX's domestic and foreign factories and devices were undergoing centralized maintenance, the market supply continued to be tight, and continued to drive up PX prices.

However, the cost pressure on the downstream polyester end had increased, and the operating load had slightly decreased. New orders for terminal weaving continued to decline, and in a state of production losses, the reduction and shutdown of terminal enterprises were still accelerating, especially in the texturing process. Some major texturing bases even experienced large-scale production reductions, and the comprehensive operating rate of weaving in the Jiangsu and Zhejiang regions had decreased to below 55%.

Market outlook

Analysts from SunSirs believe that as of the 18th, there was still good support for cost side crude oil and PX, but downstream end enterprises had poor stocking enthusiasm, mainly consuming inventory, and domestic and foreign trade new orders were limited. The subsequent construction of the weaving industry remains weak, and there is insufficient momentum for PTA prices to continue to rise.

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

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