Price trend

According to the Commodity Market Analysis System of SunSirs, the overall PTA market in China maintained a weaker trend last week (July 14-19). As of July 19, the average price of PTA market in East China was 4,776 RMB/ton, a decrease of 0.28% from the beginning of the week. In the second half of the week, the price slightly increased due to the boost of crude oil.

Analysis review

The domestic PTA supply remained stable, with no new changes in equipment, and the overall operating rate of the industry was around 80%. Among them, the 2 million ton plant of Yisheng Hainan reduced its load on July 1st due to some reasons, and increased its load on July 6th. In June, the 4.5 million ton plant of Fuhai Chuang and the 2.5 million ton plant of Dongying Weilian were still shut down.

The international crude oil market was temporarily characterized by loose supply and poor demand, coupled with the overall easing of the geopolitical situation compared to the previous period, which had limited support for oil prices and mainly led to fluctuating adjustments. As of July 17th, the settlement price of the August WTI crude oil futures contract in the United States was $67.54 per barrel, and the settlement price of the September Brent crude oil futures contract was $69.52 per barrel.

The terminal entered a seasonal off-season, with insufficient demand support and hindered procurement enthusiasm. Downstream polyester factories had once again released statements of production reduction, which was bearish for the market mentality. As of July 19th, the industry's operating rate was at 86%, and under the pressure of losses, plans were being made to implement a 10% production reduction. The demand in the weaving industry had been affected, with high inventory, shortage of orders, and losses leading to a continued decline in load to below 56%.

Future outlook:

SunSirs’ analysts believe that  terminal negative feedback continue during the traditional off-season, and the buying and selling atmosphere in the PTA spot market was flat. The expectation of PTA capacity expansion combined with the expectation of downstream polyester production reduction, it is expected that the PTA market price will be consolidated within a range.

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