Price trend

According to the SunSirs Commodity Market Analysis System, the domestic PTA market rebounded in August after a decline, with the average price in East China reaching 4,891 RMB/ton, a 1.45% increase from the beginning of the month. In the first half of the month, OPEC+ production increases and a continued decline in crude oil prices, coupled with expectations of inventory accumulation, pushed prices lower. In the second half of the month, the petrochemical industry's internal pressure and unplanned production losses at PTA plants led to a sharp rise in market prices. At the end of the month, concerns about weakening supply and demand caused prices to decline from their high levels.

Analysis review

Regarding PTA supply, some plants were undergoing maintenance, keeping the industry's operating rate at around 68%. However, market supply remained stable, with no shortages. In early September, three PTA plants, with capacities of 2.25 million tons, 2.2 million tons, and 4.5 million tons, will restart, shifting the industry's supply and demand from destocking to a more balanced state.

The crude oil market faced a complex landscape in the short term, with mixed bullish and bearish factors. On the supply side, geopolitical risks between Russia and Ukraine intensified due to Trump's deadline for negotiations, raising concerns about supply disruptions. On the demand side, declines in US crude oil inventories, including those at Cushing, and increases in Strategic Petroleum Reserves, were supporting prices. However, the implementation of US tariffs on Indian purchases of Russian crude oil may pose a hurdle. As of August 26, the October WTI crude oil futures contract settled at $63.25 per barrel, while the October Brent crude oil futures contract settled at $67.22 per barrel. Market activity remained focused on developments in the Russia-Ukraine situation and the policy guidance from the OPEC meeting on September 7.

The downstream polyester industry's operating rate rebounded slightly, with PTA purchases primarily on dips. In previous years, as autumn and winter orders gradually fill and the "Golden September" peak season begins, demand is expected to gradually rise. However, this year, ongoing tariff disputes impacted end-use textile and apparel exports, slowing the start of the "Golden September" season. Most textile companies were adopting a cautious wait-and-see approach, focusing on maintaining purchases for essential needs.

Market outlook

Analysts of SunSirs believe that while PTA supply will return in September after maintenance, the maintenance period remains uncertain. On the demand side, the market anticipates September's traditional peak season to provide a boost to the market. However, in the absence of clear guidance, PTA prices are expected to fluctuate in line with crude oil prices in the short term.

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