SunSirs: The Cost Center Declined, and PTA Prices Were Weaker

Price trend

According to the commodity market analysis system of SunSirs, the domestic PTA spot market has shown a downward trend since August. As of August 18, the average price of PTA in East China was 4,720 RMB/ton, down 2.09% from the beginning of the month.

Analysis review

Regarding PTA plants, Formosa Petrochemical and Hainan Petrochemicals have shut down, while Weilian and Jiaxing have restarted. Reduced shutdowns were continuing with maintenance, leading to a rebound in overall supply. Helun Petrochemical's 3.2 million tonne plant began trial production at the end of July and was gradually increasing capacity. The industry's overall operating rate remained around 76%.

The traditional peak fuel consumption season in the United States was coming to an end, but supply-side risks remained. International oil prices will likely fluctuate in the short term. As of August 15, the September contract for WTI crude oil futures settled at $62.80 per barrel, while the October contract for Brent crude oil futures settled at $65.85 per barrel.

Downstream polyester demand had limited room for recovery, and high weaving inventories were weighing on sentiment, with no significant improvement in seasonal stockpiling. Polyester mills remained hopeful for the traditional peak season, but without a widespread recovery in demand, sustained replenishment was difficult. Overall, a wait-and-see attitude prevailed, with purchases primarily driven by essential needs.

Market outlook

Analysts of SunSirs believe that the commissioning of new PTA plants had led to a slight increase in supply. Furthermore, with low international oil prices, the cost center continued to decline, and the overall commodity market was weak, PTA prices are expected to continue to fluctuate and decline.

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