Price trend

According to the commodity market analysis system of SunSirs, the domestic PTA market in October showed a trend of first falling and then rising. As of October 30, the spot price of PTA in East China was 4,552 RMB/ton, a decrease of 0.93% compared with the beginning of the month.

Analysis review

PTA prices continued to decline after the holiday. This was mainly due to weak macroeconomic conditions caused by tariffs, as well as the continued negative sentiment fueled by new plant commissioning and sluggish demand. In late October , with the rebound in oil prices from their lows, overall commodity sentiment improved, downstream purchasing sentiment increased during the traditional peak season, and PTA prices shifted upward.

As of October 29, the settlement price of the December contract for WTI crude oil futures was $60.48 per barrel, and the settlement price of the December contract for Brent crude oil futures was $64.92 per barrel. OPEC+ is highly likely to maintain its production increase in December, continuing the ample supply situation. With no significant improvement on the demand side, the supply-demand imbalance persisted. The lack of new developments in the geopolitical situation provided limited support for oil prices.

Major PTA plants in Northeast China restarted units that had undergone maintenance, and the industry's operating rate was temporarily around 78%. Next, 2.7 million tons of new PTA capacity in East China had begun trial production, and overall PTA output is expected to continue to increase. Furthermore, if PTA producers proactively reduce production due to low processing fees, PTA inventories may not accumulate in November and December, potentially pushing up PTA prices. However, if the production cuts are limited, they will not change the current situation of ample supply.

Overall, the "Silver October" sales season was lackluster, with limited seasonal upward momentum. Most of the market focused on digesting previous raw material stockpiles, maintaining only essential raw material purchases. After mid-October, with the combination of cold weather and the Double Eleven promotions, demand for winter fabrics increased, downstream weaving orders improved, textile companies became more active in replenishing their raw material inventories, and downstream polyester plants experienced reduced inventory pressure, operating at around 87% capacity.

Market outlook

Analysts at SunSirs believe that in the short term, cost support and a temporary improvement in demand are boosting PTA prices, which are expected to fluctuate with a slightly upward bias. Furthermore, according to SunSirs' spot market analysis method, prices broke through the 10-day and 20-day moving averages, indicating an upward trend. However, with new PTA plants coming online and previously shut-down plants gradually resuming operations, the peak demand season is also coming to an end, and oversupply will limit the extent of the rebound. Continued attention should be paid to fluctuations in cost prices and the actual fulfillment of end-user orders.

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