Price trend:

As of the close of trading on December 22nd, the PTA 2605 contract closed at 5,040 RMB/ton, an increase of 218 RMB/ton compared to the previous day's settlement price. The spot market also continued its strong performance. According to the SunSirs' commodity market analysis system, the spot price of PTA in East China on December 22nd was 4,879 RMB/ton, a 3.04% increase compared to the previous trading day.

Market Analysis

Geopolitical conflicts between Russia and Ukraine, and the US and Venezuela, boosted oil prices in the short term. On December 19th, international crude oil futures closed higher. The settlement price for the February contract of US WTI crude oil futures was $56.52 per barrel, an increase of $0.52 or 0.9%. The settlement price for the February contract of Brent crude oil futures was $60.47 per barrel, an increase of $0.65 or 1.1%. There were no significant changes in PX (paraxylene) production recently, and a slight inventory build-up is expected in December. However, due to tight spot market liquidity and low inventory levels, PX prices are expected to remain supported.

From a supply perspective, the domestic PTA industry's operating rate was around 73%, and Yisheng New Materials planned to undergo maintenance in January and February. Due to low processing fees, factories' production enthusiasm iwas limited, and there is a possibility of increased unplanned maintenance, resulting in limited supply recovery.

There were no changes to the complete downstream polyester production facilities, and operating rates remained high at around 91%. However, market sentiment towards further price increases for raw materials was generally weak. Due to the impact of the off-season for consumption, demand from end-users had weakened, and inventory accumulation was observed in sectors such as weaving and knitting.

Market Forecast:

According to analysts at SunSirs, the end-market demand was lukewarm, and downstream polyester manufacturers were not enthusiastic about price increases. However, the PTA raw material market remained strong. With continued inventory reduction and low processing fees, the short-term PTA spot market is expected to be stronger.

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