After 8 consecutive weeks of decline, PTA ushered in a rebound trend last week (December 6-10). As of December 10, the average domestic market price in East China was 4656 yuan/ton, an increase of 3.63% from the beginning of the week and a year-on-year increase of 32.98%.

During the week, the PTA capacity of the plant for maintenance and production reduction increased, and the spot was insufficient. Among them, the Honggang 2# 2.4 million tons device was postponed to restart, the 3.3 million tons of Yisheng New Materials device reduced the load, and the 2.2 million tons of Hengli Petrochemical's device was overhauled on December 10. The industry operating rate fell below 72%, and the slight destocking of PTA helped prices rebound.

After the crude oil market has experienced a severe setback in the previous period, oil prices have reached a relatively low level, and there is currently a willingness to rebound and repair. On the supply and demand side, the results of the OPEC+ meeting of the Organization of Petroleum Exporting Countries and its allies were released last week. The policy is relatively conservative. The production will increase by 400,000 barrels per day as scheduled. OPEC+ may flexibly control production in the later stage of the epidemic. In addition, the Iranian nuclear talks are still deadlocked, so it is unlikely that Iranian crude oil will return to the market in the near future, which will provide certain support to the oil market, and crude oil will usher in a strong rebound. However, as the impact of the mutant strain Omicron on the economy fermented again, people's worries about economic recovery were rekindled, and oil prices fell under pressure. As of December 9, the settlement price of the main contract of WTI crude oil futures in the United States was reported at US$70.94/barrel, and the settlement price of the main contract of Brent crude oil futures was reported at US$74.42/barrel.

In terms of demand, the downstream polyester plant's operating load is not high, maintaining around 80%. This year is a warm winter, and the domestic market for autumn and winter fabrics appears to be particularly light. Weaving factories' inventories continue to rise, and the inventory is relatively large in the vicinity of 2 months. Entering December, foreign trade orders have not improved significantly, and the terminal weaving market has declined. In addition, the recent printing and dyeing factory orders have been significantly reduced, and subsequent or early holidays, the overall production enthusiasm of the weaving factory is not high, and the current operating load of Jiangsu and Zhejiang looms is about 65%.

At present, the PTA cost support remains, and the supply side reduction brought about by the centralized maintenance of the device has brought a boost to the PTA market. However, weak demand will restrain the increase in PTA. The current terminal orders are still relatively light. At the same time, there are concerns about uncertainties in the foreign trade market after the year. It is expected that before the Spring Festival this year, weaving factories may be relatively cautious in stocking, and the holiday time of weaving factories may be earlier than in previous years. On the whole, PTA will continue to fluctuate upward in the short-term, and the impact of the epidemic situation in Jiangsu and Zhejiang on logistics is still needed in the near future.

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