Price trend:
Starting in mid-December, PTA prices continued to strengthen. According to the commodity market analysis system of SunSirs, as of the end of December, the spot price of PTA in East China was 5,045 RMB/ton, an increase of 9.16% compared to December 16th.
Market Analysis
The supply and demand pressure for PTA was not significant. Under low processing fees, major factories proactively reduced production through planned shutdowns and maintenance, resulting in a concentration of PTA plant maintenance in November and December. As of December 29th, the PTA operating rate was around 72%, and market supply is expected to continue to decrease. As of December 29th, PTA inventories were continuously declining. Although there may be a slight increase in inventory in January-February due to seasonal reductions in downstream polyester production, overall inventory pressure remained low, and the fundamentals were stable.
Crude oil prices rebounded from their recent lows, boosting costs. As of December 26th, the settlement price for the February contract of US WTI crude oil futures was $56.74 per barrel, and the settlement price for the February contract of Brent crude oil futures was $60.60 per barrel. The situation between the US and Venezuela remained unstable, but a full-scale escalation is not expected in the short term. Furthermore, there are expectations of a de-escalation in the Russia-Ukraine conflict, which will weaken the geopolitical support for oil prices.
Downstream markets lacked the momentum to chase higher prices, and the polyester industry was experiencing both losses and production cuts, with the decline in operating rates accelerating after the middle of the month. Terminal weaving factories had largely completed their winter orders, and due to the later timing of the 2026 Chinese New Year, spring orders were generally delayed, consisting mainly of small and scattered orders. Amidst bearish expectations, some textile factories may close for the holidays earlier than usual.
Market Outlook
According to analysts at SunSirs, as the off-season for textiles deepened, downstream buyers' willingness to chase higher prices was being hampered. However, the strong support from PTA raw materials, coupled with low processing fees, suggests that PTA prices are expected to continue to be stronger in the short term.
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