Recently, bullish factors have gained momentum in the PTA market; plant operating rates have dropped to historic lows, driving rapid inventory depletion and a sharp rise in processing margins. At the same time, bearish factors are also accumulating, as the window for a wave of plant restarts approaches and end-user demand remains weak during the off-season. Driven by the interplay of these factors, PTA prices are exhibiting a range-bound oscillation pattern, supported by a cost floor while facing downward pressure from the prospect of resumed production.

Operating rate hit a record low

As of August 12, the operating rate of PTA plants had fallen to 48.39%—a historic low rarely seen in years—marking a decline of approximately 25 percentage points compared to the same period in 2025. This extreme contraction in supply has driven a rapid rise in processing margins while simultaneously accelerating the pace of inventory destocking.

The recent sharp drop in operating rates stems from a confluence of factors. First, in early August, Dalian Yisheng's facility (with an annual capacity of 3.75 million tons) and some units at Dushan Energy underwent maintenance, directly reducing effective capacity. Second, tight PX supplies and a shortage of raw materials constrained PTA plant operating rates, forcing some facilities to cut production. Third, recent typhoons disrupted port logistics and plant operations, causing some units to temporarily lower operating loads or even halt production. Fourth, with downstream polyester plant operating rates remaining low and PTA procurement demand weak, upstream producers voluntarily reduced output amidst low processing margins. Under these combined pressures, the contraction in PTA supply has reached historic extremes, serving as the core support for current market pricing.

Inventory reduction efforts have yielded results

With the sharp decline in plant operating rates, PTA supply has contracted drastically, accelerating the depletion of inventories in the spot market. According to data from Longzhong Information, PTA inventory fell to 1.7427 million tonnes for the week ending August 8—a decrease of 15.47% week-on-week and 52.82% year-on-year.

The scale of this inventory drawdown has significantly exceeded market expectations, reflecting the profound impact of concentrated maintenance shutdowns on supply. The current absolute inventory level of 1.7427 million tonnes is at a low for this time of year, providing a strong floor for PTA prices. However, it is important to note that this destocking is driven by supply contraction rather than a surge in demand; the sustainability of future price strength hinges on the pace at which plants resume operations and the polyester market's capacity to absorb supply. Should plant restarts lag behind market expectations or demand recover, the current pattern of tight PTA supply will likely intensify further.

Processing costs were rising rapidly

As supply contracts and inventory levels decline, PTA spot processing margins have seen a significant recovery. On August 12, the PTA processing margin widened from 290 RMB/ton the previous day to 351.69 RMB/ton—an increase of over 60 RMB/ton in a single day—marking a substantial rise from recent lows.

This rapid recovery in processing margins signals a growing willingness to restart production facilities that had previously been idled due to losses, potentially undermining the logic behind the supply contraction. Meanwhile, with the market approaching the traditional "Golden September and Silver October" peak consumption season, there are expectations of a seasonal rebound in demand from the polyester and downstream textile sectors, which could provide some price support. However, judging by current orders for downstream weaving, demand during this year's peak season is likely to see only a moderate recovery rather than replicating the strong performance seen in previous years; the actual extent of the boost warrants a cautious assessment.

Summary

In the short term, PTA prices are fluctuating within a range, with the overall trend contingent on the timing of plant restarts and the materialization of peak-season demand. If the pace of production resumption outstrips the recovery in demand, the trend of recovering processing margins will likely end prematurely, placing downward pressure on prices. Conversely, should demand exceed expectations, PTA prices retain the potential for further upside. In the medium term, if a wave of plant restarts occurs following the peak season, supply conditions will loosen again, posing a risk of price correction.

As an integrated internet platform providing benchmark prices, on August 14, the benchmark price for PTA was 6,075.07 RMB/ton, an increase of 2.17% compared to the beginning of the month (5,945.75 RMB/ton).

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