Price trend

According to SunSirs' commodity market analysis system, the domestic PTA market experienced a decline followed by a rise in January. As of January 31st, the spot price of PTA in East China was 5,298 RMB/ton, a 4.33% increase compared to the beginning of the month.

Market ananlysis

At the beginning of the month, weak demand and numerous external uncertainties led to a generally pessimistic sentiment in the chemical industry, resulting in a narrow and weak price adjustment for PTA during the first half of the month. Starting in the latter half of the month, influenced by geopolitical factors, oil prices continued to strengthen, providing strong cost support. Additionally, a general improvement in commodity market sentiment and favorable capital flows boosted PTA prices.

Regarding domestic supply, the operating rate of the PTA industry was 75% at the end of the month. Hanbang Petrochemical's 2.2 million-ton plant shut down on January 6th, Yisheng New Materials' 3.6 million-ton plant shut down on January 14th, Dushan Energy's 3 million-ton plant restarted on January 14th, and Zhuhai BP's 1.25 million-ton plant shut down on January 16th. As of January 31, there were no significant changes in supply. With the continued reduction in downstream polyester production, the range of polyester operating rates was expanding, and it is expected that the accumulation of PTA social inventory will also increase.

As of January 31, crude oil market prices were rising. As of January 29th, the settlement price for the March contract of US WTI crude oil futures was $65.42 per barrel, and the settlement price for the April contract of Brent crude oil futures was $69.59 per barrel. The crude oil market was being driven by a combination of positive factors, including supply disruptions caused by winter storms in the United States and rising geopolitical tensions in the Middle East. The core drivers were significant short-term supply disruptions, coupled with a rebound in geopolitical risk premiums, leading to a concentrated release of bullish sentiment and a sustained upward trend in crude oil prices.

As the Spring Festival approaching, several polyester plants were undergoing maintenance, causing industry production to continue to decline significantly to around 81%. Entering February, with the Spring Festival drawing closer, many plants in the industry were planning production cuts and maintenance, and it is expected that the domestic polyester industry's supply will decline significantly. Specifically, the price of polyester filament yarn followed the rapid increase in raw materials, but it was difficult to pass on the price increase to downstream customers. The focus was mainly on digesting existing raw material inventories, and passive replenishment of inventory occurred due to the rapid increase in raw material prices. Polyester staple fiber also saw price increases, and the price hikes boosted sales, leading to a significant reduction in staple fiber inventory at the end of the month.

Market outlook

According to analysts at SunSirs, the short-term outlook will be affected by weakening demand, as downstream polyester factories implement production cuts during the Spring Festival period, leading to an accumulation of PTA supply in the near term. However, in the long term, the PTA industry will enter a period of capacity vacuum in 2026, with no new capacity additions. As the period of concentrated capacity expansion ends, PTA processing fees are expected to gradually improve, and the long-term outlook remains positive.

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