SunSirs: With Expectations of Inventory Accumulation Still Present, PTA Prices Were Fluctuating and Trending Weaker

Price trend:

According to SunSirs' commodity market analysis system, the domestic PTA market experienced slight fluctuations and a downward trend in December. As of December 14th, the spot price of PTA in East China was 4,639 RMB/ton, a decrease of 1.35% compared to the beginning of the month.

Market Analysis

Recent risks to crude oil supply had not been eliminated, and concerns about reduced crude oil supply due to geopolitical tensions continued to support oil prices. However, crude oil demand had not improved. Overall, international oil prices are expected to fluctuate weakly in the short term. As of December 11th, the settlement price for the January contract of US WTI crude oil futures was $57.60 per barrel, and the settlement price for the February contract of Brent crude oil futures was $61.28 per barrel. While some PX (paraxylene) plants restarted after short shutdowns, and the blending market had cooled somewhat, increased maintenance at PX plants in the future is expected to lead to lower operating rates, providing some support to prices.

Regarding supply, there were temporarily no plans for adjustments to existing PTA production facilities. Some plants that were shut down in November had not yet restarted, such as the Yisheng Ningbo 2.2 million-ton plant which was shut down on November 20th; the Dushan Energy 2.5 million-ton plant which was shut down on November 5th; and the Zhuhai BP 1.1 million-ton plant which was shut down on November 6th. Supply remained stable, with the overall industry operating rate around 73%.

Downstream polyester plants had seen little change in their operating rates, maintaining a high level of around 86%. Since the beginning of December, the polyester filament market was quite sluggish, with factory inventories continuously increasing and manufacturers showing a stronger willingness to sell. End-use weaving companies had reduced their enthusiasm for raw material procurement and had not shown any signs of large-scale restocking.

Market Forecast:

According to analysts at SunSirs, the approaching Christmas season is expected to bring a seasonal increase in demand, which may support oil prices. Some downstream polyester factories may close for the holidays earlier than usual, leading to an expected decline in weaving operating rates. As of December 14, inventory accumulation was still anticipated, and PTA prices are expected to show a volatile downward trend.

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