Price trend

The domestic PTA market rebounded after a period of sustained decline in September. According to the SunSirs Commodity Market Analysis System, the average price in East China was 4,612 RMB/ton by the end of September, down 3.01% from the beginning of the month. Concerns about continued crude oil production increases, expectations of increased PTA supply, and tepid demand led to a decline in prices in mid-to-early September. At the end of the month, the continued conflict between Russia and Ukraine posed potential supply risks, leading to a rebound in crude oil prices and improved supply and demand in downstream pre-holiday stocking, which led to a slight recovery in PTA prices from their lows.

Analysis review

The crude oil market, influenced by both bullish and bearish factors, saw wide price fluctuations in September. As of the 26th, the November contract for US WTI crude oil futures settled at $65.72 per barrel, and the December contract for Brent crude oil futures settled at $69.22 per barrel. Geopolitical factors remained a key factor influencing the crude oil market. The Russia-Ukraine issue had contributed to a relatively stronger market, while the Federal Reserve's interest rate cut had been positive for the international oil market and the crude oil market. Furthermore, the potential for increased Saudi crude oil production, rising US crude oil inventories, and the end of the US oil consumption season, coupled with a pessimistic global economic outlook and oil demand, had put pressure on crude oil prices.

In September, PTA plants underwent both maintenance and restarts. As of September 29, the industry's operating capacity was around 77%, with significant fluctuations in plant supply. However, overall spot supply remained ample, with a slight accumulation of social inventories. According to the maintenance schedule, Xinjiang Zhongtai's 1.2 million tonne plant was shut down for two weeks starting on September 19th. INEOS's Phase 2 1.1 million tonne plant is expected to begin maintenance in mid-to-early October. Hengli Petrochemical's Dalian plant is scheduled to begin annual maintenance on October 11th. In terms of new production capacity, domestic PTA production had added 5.7 million tonnes so far this year, representing a 6.62% growth rate. If Dushan Energy's Phase 4 3 million tonne plant begins production as scheduled in October, the total PTA industry capacity growth rate will further increase to 10.11%, further increasing market supply pressure.

At the end of the month, affected by the pre-holiday period, some downstream polyester mills made small replenishments, leading to a partial recovery in production and sales. While we were in the traditional peak consumption season of September and October, the downstream polyester market had not seen the expected significant rebound in demand, resulting in a generally flat market performance and limited support for upstream PTA prices. While terminal orders had seen a modest recovery, the volume remained modest, and high inventory levels constrained weaving mills to be cautious in purchasing raw materials such as polyester filament, focusing on small batches.

Market outlook

Analysts of SunSirs believe that weakening cost support and the continued addition of new PTA production capacity exacerbated market concerns about oversupply. Downstream inventory replenishment had largely concluded before the National Day holiday, and the loose supply situation is expected to continue. PTA prices are expected to remain weaker in October.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.