SunSirs: Demand Performance Fell Short of Expectations, and PTA Prices Adjusted Narrowly

Price trend

Planned restarts at PTA plants have been postponed, change in overall demand was little, and cost support was reasonable. Last week (September 15-19), the domestic PTA market saw narrow fluctuations. According to the SunSirs commodity market analysis system, the average PTA price in East China was 4,631 RMB/ton as of September 19, down 0.01% from the beginning of the week.

Analysis review

On the one hand, the potential supply risks posed by the Russia-Ukraine conflict, particularly concerns about crude oil supplies from a European country, intensified. Coupled with the Federal Reserve's interest rate cuts, international oil prices have recently risen, supporting PTA costs. As of September 18, the November contract for WTI crude oil futures settled at $63.26 per barrel, while the December contract for Brent crude oil futures settled at $66.92 per barrel.

PTA processing fees remained near this year's low, with factories operating at a loss. Xinjiang Zhongtai's 1.2 million tonne unit shut down on September 19th, leaving the domestic industry operating rate at around 76%. There are expectations of restarting domestic plants in the near future, and some PTA plants have added maintenance plans for October and November, which was positive for market sentiment.

On the demand side, polyester plants saw minimal changes, with minor fluctuations in local loads, while overall load rebounded to 91%. Terminal performance was lukewarm, falling short of expectations during the traditional peak season. Orders remained mediocre, and inventory levels suppressed fabric prices. For example, polyester filament prices declined, and raw material inventory levels decreased, leading to widespread pessimism in the market.

Future outlook:

Analysts of SunSirs believe that in the short term, cost support will remain strong, but the incremental expectations on the PTA supply side will hinder downstream purchasing enthusiasm. It is expected that the domestic PTA market will be mainly weakly volatile next week.

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