Price trend

On June 24th, international crude oil futures plummeted to a two-week low. The settlement price of the August WTI crude oil futures contract in the United States was $64.37 per barrel, a decrease of $4.14 or 6.0%. The settlement price of Brent crude oil futures for August was $67.14 per barrel, a decrease of $4.34 or 6.1%. The expected ceasefire agreement between Israel and Iran reduced the risk of oil supply disruptions in the Middle East.

The PTA market followed the decline in crude oil prices. According to the Commodity Market Analysis System of SunSirs, on June 24th, the focus of the domestic PTA spot market shifted downwards. The average price of PTA in the East China region was 5,114 RMB/ton, with a daily decline of 3.18%. In terms of supply, Yisheng Dahuan's 3.6 million ton production capacity had decreased by 50%, and Hengli Petrochemical's 2.2 million ton maintenance had led to a slight contraction in domestic supply. The overall construction rate of the industry was around 78%. The new production capacity of Honggang Petrochemical, 2.5 million tons, was put into operation on June 7th, with an increase in production capacity.

Analysis review

Downstream polyester maintained essential procurement, and the polyester production load remained at around 90% in late June. However, there were still expectations of reducing the burden, and the officially announced maintenance plan for the polyester plant was scheduled for July. Under the influence of the off-season effect, the number of orders from terminal textile enterprises was insufficient, and new orders were still mostly small autumn and winter sample orders. Entering August, the weather is hot and the off-season characteristics are obvious. The production reduction efforts of polyester factories will further increase, so the expectation of weak demand is strong.

Market outlook

SunSirs’ analysts believe that in the future, strong geopolitical uncertainty will amplify oil price fluctuations, and the supply of PX raw materials will return. The new PTA plant has been put into operation and gradually increased its load, leading to an increase in domestic supply. Coupled with a certain decrease in downstream polyester industry load, there is an expectation of a weakening in PTA supply and demand. It is expected that PTA prices will continue to follow the cost in the short term.

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