SunSirs: Expected Supply Contraction, Supporting a Slight Strengthening of PTA Prices

Price trend

According to the commodity market analysis system of SunSirs, the price of the domestic PTA spot market rose slightly on May 23, and the average price in East China was 5,589 RMB/ton, up 0.64% from the previous day.

Analysis review

A set of 2.5 million ton/year production capacity device from Dushan Energy started short shutdown last week, and Hengli Petrochemical's 4# 2.5 million ton/year production capacity device was repaired on May 20th for a period of approximately 20 days. Recently, Hengli Petrochemical and Fujian Baihong have maintenance plans. In May, domestic PTA maintenance devices were still concentrated, and the industry's operating rate had been lowered to below 75%. Supply contraction is expected, and the overall destocking speed is expected to accelerate in the near future.

OPEC+ supply from oil producing countries is expected to tighten, coupled with an expected increase in oil demand in the second half of the year. On May 22nd, international crude oil futures rose. The settlement price of the main contract for WTI crude oil futures in the United States was 72.05 US dollars per barrel, with an increase of 0.36 US dollars or 0.5%. The settlement price of the main contract for Brent crude oil futures was 75.99 US dollars per barrel, an increase of 0.54 US dollars or 0.5%.

Affected by the decline in cost side prices in the early stage, the profits of the industrial chain have shifted downstream, and downstream polyester production reduction parking devices have gradually resumed operation. The operating rate of polyester factory devices has increased to over 88%, and it is expected to continue to rise slightly. However, the terminal market is still in the traditional off-season of demand, and the ordering atmosphere is still weak. Pay attention to the situation of terminal orders.

Market outlook

Analysts from SunSirs believe that the crude oil market has undergone a volatile adjustment, with an increase in PTA's own maintenance devices, downstream polyester profits being repaired, and there is a rigid demand support for increased production and capacity expansion. In the short term, the decrease in PTA supply and the increase in demand will lead to a decrease in inventory accumulation, providing positive support for PTA prices.

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