SunSirs: The Supply Was Reduced, and PTA Prices Slightly Rebounded

Price trend

According to the Commodity Market Analysis System of SunSirs, the domestic PTA market had slightly rebounded this week (October 23-27), with an average market price of 5,875 RMB/ton in East China as of October 27, an increase of 0.42% compared to the beginning of the week.

Analysis review

In terms of PTA supply, the industry's operating rate was 78%. The Zhuhai Ineos 1# 110,000 ton PTA plant was overhauled in mid October until the end of November, with a load of 80-90% for the 2# 125,000 ton PTA plant. In addition, Hengli's 2.2 million ton PTA plant had been delayed in restarting and contract goods had been reduced. Next week, Yisheng Ningbo's 2.2 million ton and Yadong Petrochemical's 700,000 ton PTA units were scheduled for maintenance in early November. There were temporarily no plans to restart new PTA devices, and the supply of PTA goods had decreased.

Recently, crude oil prices had fluctuated repeatedly due to the conflict between Palestine and Israel, as well as expectations of weak demand. On October 26th, the settlement price of the main contract for WTI crude oil futures in the United States was at 83.21 US dollars per barrel, while the settlement price of the main contract for Brent crude oil futures was at 87.05 US dollars per barrel. Overall cost support had weakened.

The polyester load remained at a high level of nearly 90%, relatively strong. As the end of October approached, terminals were gradually weakening, and the "Double Eleven" and Christmas promotion effects were limited, resulting in insufficient motivation to undertake new orders. As of October 27th, most weaving manufacturers had increased inventory pressure, coupled with weak new orders. The enthusiasm for replenishing raw materials had decreased, only maintaining just in demand and consuming more inventory of raw materials. This had caused a certain drag on the polyester market, and the prices of various polyester products showed a slight weakening.

Market outlook

SunSirs’ analysts believe that the recent reduction of contract goods by mainstream PTA suppliers had boosted the market and temporarily eased the supply-demand contradiction. However, due to weakened cost support and insufficient terminal demand, there is still downside risk in PTA prices.

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