In the crude oil market, prices faced downward pressure as OPEC+ continued to boost production, U.S. output remained elevated, and expectations grew for a resolution to the Russia-Ukraine conflict. However, U.S. sanctions on Venezuelan crude and ongoing clashes ahead of peace talks between Russia and Ukraine provided some support for oil prices.

In the PX market, December saw limited maintenance at Asian PX facilities, keeping overall supply elevated. As of December 12, domestic PX facility utilization remained stable at 88.1%. The restart of Saudi Arabia's Satorp and Japan's Idemitsu plants, coupled with the recovery of Vietnam's NSRP plant capacity utilization, elevated Asia's PX capacity utilization to 79.3%. However, since December, the PX pricing cycle has shifted to January-February next year, and strong expectations for capacity reductions at major PX producers in East China have improved the fundamentals outlook for PX.

Regarding PTA supply, in November, maintenance shutdowns at INEOS (1.1 million tons/year capacity), CNPC Energy Investment (1 million tons/year capacity), and Yisheng Ningbo (2.2 million tons/year capacity) kept PTA operating rates below 75%, resulting in a significant supply reduction. No additional PTA maintenance shutdowns are scheduled for December.

On the demand side, polyester plants delayed production cuts due to sustained domestic and international demand. Additionally, the removal of India's BIS certification is expected to boost exports of PTA and downstream polyester products, keeping polyester plant utilization rates elevated. As of December, average polyester plant utilization remains at a relatively high 91%, exceeding previous expectations.

Comprehensive analysis indicates that the PTA balance sheet may see a 200,000-ton inventory drawdown in December. During this process, the PTA basis has strengthened continuously, moving from -75 yuan/ton in mid-November to the current -20 yuan/ton. Regarding market liquidity, in mid-October, anticipating weaker PTA fundamentals, the PTA basis weakened to -90 yuan/ton, approaching risk-free arbitrage levels. Some traders pre-booked warehouse space for storage, leading to a significant increase in forecast warehouse receipts in early November. As of December 12, registered PTA warehouse receipts exceeded 140,000 contracts, equivalent to approximately 700,000 tons of PTA inventory. The substantial increase in registered warehouse receipts reduced the supply entering the spot market. Combined with export activities and weather impacts, domestic shipping schedules slowed, leading to decreased arrivals at some ports. Driven by restocking demand from traders and polyester mills, the basis continued to rise.

December PTA supply is expected to tighten. Although some maintenance units will restart by month-end, unplanned outages may increase given the persistent PTA spot processing margin below CNY 200/ton. With seasonal weakening of downstream demand and declining polyester operating rates, coupled with low load factors at both downstream and polyester plants around the Spring Festival, PTA inventory buildup is anticipated in Q1 next year. Recent polyester plant operations show little overall change, with market activity balancing restarts and maintenance while maintaining high capacity utilization. However, polyester downstream exhibits pronounced seasonality. As of December 12, terminal capacity utilization in Jiangsu and Zhejiang has already declined locally, with texturing, weaving, and printing/dyeing plants operating at 83%, 67%, and 70% capacity respectively—down 5, 9, and 12 percentage points from early November peaks. Weaving plants face insufficient new order follow-through. With order shortages and continued slow market shipments, both woven and knitted segments are experiencing inventory buildup. While end-user negative feedback remains subdued, the pace of weakening terminal demand is accelerating. Overall, the PTA market is not supply-constrained, limiting further basis expansion potential and leaving room for periodic corrections.

Comprehensive analysis indicates that with some maintenance units restarting in late December, PTA supply is expected to increase. Coupled with seasonal weakening of end-demand and the seasonal slowdown of polyester plants, PTA inventory accumulation is anticipated in Q1 next year. This limits the upside potential for PTA basis and restricts absolute price drivers. However, in the medium term, the PX market outlook is improving, and with low PTA processing margins, cost support remains relatively strong.

As an integrated internet platform providing benchmark prices, on December 15th, the benchmark price of PTA (Purified Terephthalic Acid) according to SunSirs was 4639.40 RMB/ton, a decrease of 0.41% compared to the beginning of the month (4658.50 RMB/ton).

Application of SunSirs Benchmark Pricing：

Traders can price spot and contract transactions based on the pricing principle of agreed markup and pricing formula (Transaction price=SunSirs price + Markup).

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