A renewed escalation of geopolitical tensions in the Middle East has driven a rebound in international crude oil prices, while rising upstream PX prices have provided cost support; these factors, combined with sustained inventory depletion resulting from concentrated maintenance shutdowns across the PTA industry, have pushed PTA prices higher this week. As of July 24, the market price in East China stood at 6,170 RMB/ton, up 1.49% from the beginning of the week. However, gains were capped as the downstream weaving sector remains in its traditional off-season, with polyester plants limiting their purchases to immediate needs.
On July 23, the crude oil market saw a fresh, sharp rally—with Brent crude firmly reclaiming the $100-per-barrel mark for the first time in two months—driven by a convergence of risks at two key Middle East oil transit chokepoints, resulting from an attack on a Saudi tanker in the Red Sea and the continuing escalation of tensions between the U.S. and Iran. The settlement price for the U.S. WTI crude oil futures contract for September delivery rose by $5.36 (6.2%) to $92.19 per barrel, while the settlement price for the Brent crude futures contract for September delivery climbed by $6.62 (7.0%) to $100.69 per barrel.
PX prices have risen in tandem with crude oil, establishing a cost floor for PTA; currently, PX plants are operating at low rates, market inventories are steadily declining, and supplies are tight—factors compounded by delayed restarts at certain facilities—thereby providing bullish support for PTA costs.
Regarding supply, concentrated maintenance in July drove the industry operating rate down to a low of around 53%. With an estimated inventory drawdown of 900,000 tonnes for the month, spot inventories have hit multi-year lows, offering strong price support. However, PTA plants with a combined capacity of several million tonnes—including those of Honggang Petrochemical, Fuhaichuang, and Zhongtai Chemical—are set to restart between late July and early August. The market is already pricing in this anticipated supply recovery; consequently, the pace of inventory drawdown has slowed significantly, and processing margins are expected to gradually contract from their previous highs.
In terms of downstream demand, as the weather warms, the textile industry is entering its traditional off-season; weaving enterprises in the Jiangsu and Zhejiang regions are facing a shortage of orders, and market sentiment regarding a strong recovery during the peak season remains pessimistic, resulting in insufficient bullish momentum. With loom operating rates unlikely to rise—compounded by geopolitical uncertainties—textile enterprises are struggling to pass on cost pressures to the end market. Consequently, these enterprises are maintaining a strategy of low inventory and high turnover, which suggests that the increase in polyester operating rates in August will likely be limited.
Overall, analysts at SunSirs believe that in the short term, crude oil prices will continue to rise due to geopolitical tensions. While PTA supply remains low—partly due to extensive maintenance on PX units—downstream buying interest at higher price levels is weak, and there are concerns regarding the eventual recovery of PTA supply. Consequently, PTA prices are expected to fluctuate in line with cost trends in the near term. Future market developments will depend on geopolitical dynamics and the status of PTA plant restarts.
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