SunSirs: PTA Prices Fluctuated in a "W" Pattern in 2025; and the Outlook for 2026

According to SunSirs' commodity price analysis system, domestic PTA prices in 2025 showed a "W" shaped trend. As of December 31st, the average market price in East China was 5,079 RMB/ton, a 6.04% increase compared to the beginning of the year.

It can be divided into four stages:

I. Early January to mid-April: Volatile downward trend

At the beginning of the year, prices fluctuated around 4,900 RMB/ton. After a brief rebound in March, prices fell significantly in April, reaching a yearly low of around 4,300 RMB/ton, a drop of over 10%, mainly due to fluctuations in raw material prices and weak demand from the downstream polyester industry.

II. Late April to June: Rapid rebound

After hitting a low point, prices began a strong rebound, rising to a year-to-date high of over 5,200 yuan within just two months, an increase of over 20%. This rebound was driven by rising PX raw material prices, maintenance shutdowns at PTA plants leading to supply contraction, and increased demand from downstream industries resuming operations and replenishing inventories.

III. July to October: Second decline

After a rebound, prices entered a downward trend again, fluctuating and declining continuously from July to October. The center of gravity of crude oil prices continued to shift downwards. Due to the prolonged period of high temperatures, demand was slow to pick up, leading to a decline in downstream polyester operating rates and weak demand for PTA spot goods. The market supply and demand dynamics weakened.

IV. November to the end of the year: Strong upward trend at the end of the year.

After bottoming out in October, prices saw a significant rebound towards the end of the year, continuously rising from November onwards and recovering to over 5,100 RMB/ton by year-end, representing a gain of over 10%. This surge was primarily driven by cost support from PX raw materials, a reduction in PTA social inventory, increased stocking demand from downstream polyester companies at the end of the year, and improved market sentiment, all contributing to the rapid price increase.

Overall, the key drivers of PTA price fluctuations in 2025 was raw material costs, supply changes due to plant maintenance, and seasonal fluctuations in downstream polyester and textile demand.

Based on price trends over the past three years, prices in 2025 fluctuated mainly between 4,500 and 5,000 RMB/ton, remaining at a relatively low level overall.

Looking ahead to 2026:

In terms of production capacity, by the end of 2025, the total PTA production capacity reached 94.715 million tons, representing a capacity growth rate of 10%. In terms of output, domestic PTA production in 2025 was 73.9 million tons, an increase of 2.1 million tons compared to 2024, with a production growth rate of 2.9%, lower than the capacity growth rate. Due to low processing fees, factory maintenance and production cuts are increasing, leading to a decline in PTA capacity utilization to around 78% in 2025. Some new capacity additions involve replacing older facilities with new ones; therefore, despite the high growth rate of new capacity, the actual increase in PTA supply was relatively limited.

In 2025, new PTA capacity was added by Shenghong (2.5 million tons), Sanfangxiang (3.2 million tons), and Xinfengming (3 million tons). Currently, it appears there will be no new PTA capacity added in 2026, and long-term plans are unlikely to materialize within the year, potentially ending a seven-year period of capacity expansion. The industry remains in a cycle of overcapacity, with low processing fees forcing supply contraction and leading to a more balanced supply-demand situation. Processing fees are expected to recover.

In terms of export volume, the total PTA export volume in 2025 was 3.85 million tons, a decrease of approximately 500,000 tons compared to 2024. PTA export growth faced certain bottlenecks, mainly due to India's BIS certification policy and the commissioning of local PTA plants in Turkey. Previously, due to the restrictions imposed by India's BIS certification, China's PTA exports to India decreased by 370,000 tons year-on-year from January to October 2025. However, on November 12th, India announced the immediate revocation of BIS certification for PTA products, giving Chinese PTA producers the opportunity to re-enter the Indian market. Exports quickly recovered, with PTA exports reaching 358,900 tons in that month, a 61.26% increase month-on-month. It is expected that domestic PTA exports will see a significant improvement in the short term.

In terms of costs, in 2025, driven by loose supply and demand and disrupted by geopolitical events, the crude oil market performed relatively weakly overall, with international oil prices showing a volatile downward trend. WTI crude oil fell by approximately 18% for the year, and Brent crude oil fell by approximately 17%. In 2026, the external environment for crude oil remains quite complex, with intricate geopolitical situations and continuous conflicts, which will have an unpredictable direct impact on oil prices, causing volatility in the crude oil market. Supply and demand dynamics will still be dominant, with oversupply expected to continue into the first half of 2026. OPEC+ may restart production cuts, but the effect will be limited, and prices are likely to continue to decline.

In 2025, domestic PX prices experienced significant fluctuations. As of December 31st, the market price of PX was 7,500 RMB/ton, a 5.51% increase compared to the beginning of the year. The release of new overseas PX production capacity led to significant oversupply pressure, resulting in a weak price adjustment, with prices reaching their lowest point of the year in the second quarter. However, concentrated maintenance shutdowns of Asian plants led to a supply contraction, supporting a rebound in prices after bottoming out in the fourth quarter. Additionally, the overcapacity and low processing fees in the PTA industry led to cautious PX purchasing, limiting the upward potential of PX prices. The initial recovery of PTA processing fees in the fourth quarter resulted in a marginal improvement in PX demand.

Starting in 2024, with the in-depth adjustment of the national industrial structure and the continuous optimization of the market landscape, the PX industry has entered a period of capacity expansion plateau. From a supply perspective, there was no new PX capacity added domestically in 2025. After excluding long-term idled capacity, the total PX capacity will be 43.44 million tons, with a capacity growth rate of -0.5%. In terms of output, domestic PX production in 2025 was 38.4 million tons, an increase of 700,000 tons compared to 2024, representing a production growth rate of 1.9%. The domestic PX capacity utilization rate will further increase to 88.4% in 2025, reaching its highest level in recent years. Meanwhile, new facilities planned for commissioning in 2026 are generally concentrated in the second half of the year and face the risk of delays, and the potential for increasing existing supply is also limited. Under the guidance of "anti-overcapacity" policies, supply contraction may become the norm, further optimizing the industrial structure. Market sentiment is bullish, and PX prices are expected to remain strong.

In terms of demand, the overall price trend for various types of polyester in China throughout 2025 was relatively consistent, with a significant downward shift compared to the beginning of the year. Specifically, polyester POY decreased by 5.93%, polyester DTY by 6.25%, polyester FDY by 8.69%, and polyester staple fiber by 8.69%.

After the Spring Festival, the resumption of operations in downstream weaving factories fell short of expectations, and terminal orders were scarce. Polyester companies rapidly accumulated inventory and proactively lowered prices to reduce stock. From January to March, prices fell rapidly from their highs, reaching the first low point of the year in mid-to-late March. From April to June, prices experienced a phased rebound and recovery, reaching a mid-year high in June. The stabilization and recovery of upstream PX and PTA prices provided cost support, coupled with a temporary replenishment of overseas orders, leading to a recovery in downstream weaving operating rates and driving demand for polyester. After July, prices entered another period of volatile decline. The recovery of domestic and international demand for textiles and apparel was weak, and the traditional peak season of September and October failed to materialize. This, coupled with the continuous release of production capacity in the polyester industry, exacerbated the supply-demand imbalance, putting pressure on prices.

Polyester capacity expanded in 2025, although the growth rate slowed down compared to the previous two years. In 2025, a total of 4.45 million tons of new polyester capacity was added (excluding retired capacity), bringing the total capacity to 89.84 million tons by the end of the year, representing a growth rate of 5.21%. In terms of production, the cumulative polyester output in 2025 was 79.44 million tons, an increase of 5.01 million tons compared to 2024, representing a year-on-year growth rate of 6.7%. The overall capacity utilization rate of the polyester industry in 2025 was around 86%, a relatively high level in recent years, providing strong demand support for PTA.

Looking ahead to 2026, the polyester industry will continue to see new capacity coming online, with planned production of 4.1 million tons. It is estimated that by the end of 2026, polyester capacity will reach approximately 93.94 million tons, representing a capacity growth rate of 4.6%, a slowdown compared to 2025. Of this, 2 million tons of polyester filament yarn are planned for production, bringing the total capacity to 57.2 million tons in 2026, a growth rate of 3.6%. Polyester staple fiber production is planned at 900,000 tons, bringing the total capacity to 10.79 million tons in 2026, a growth rate of 9%. Polyester bottle chip production is planned at 700,000 tons, bringing the total capacity to 22.63 million tons in 2026, a growth rate of 3.2%. The remaining new capacity will be in recycled new materials.

The growth rate of China's polyester production capacity has slowed down. Amidst overcapacity, factories are actively expanding into overseas markets, leading to a surge in investment in Southeast Asia and Egypt. In 2025, polyester exports maintained high growth, reaching approximately 14.58 million tons, a year-on-year increase of 13.5%. Polyester staple fiber exports are particularly strong, projected at 1.7 million tons, an increase of 400,000 tons compared to last year, representing a 30% growth rate. Polyester filament exports are expected to reach 4.25 million tons, an increase of approximately 370,000 tons year-on-year, a growth rate of 10.7%. This high growth in polyester exports has become a crucial way to absorb the increased production. In 2026, driven by domestic capacity expansion, cost and profit advantages, expanding overseas demand, favorable trade policies, and companies' global strategies, export demand is expected to continue to grow.

As a downstream industry of PTA, the textile and apparel sector was experiencing overall stable and slow growth in both domestic and international demand. Looking at the weaving segment, the average operating rate of weaving machines was 63% in 2025, a decrease compared to 2024.

China's domestic demand for textiles and apparel was growing steadily. From January to November, the retail sales of clothing, footwear, headwear, textiles, and knitwear by enterprises above a designated size reached 1,359.67 billion yuan, a year-on-year increase of 3.5%.

In terms of exports, from January to November, China's cumulative exports of textiles and apparel reached US$267.8 billion, a year-on-year decrease of 1.9%. Of this, textile exports amounted to US$130.01 billion, a year-on-year increase of 0.9%, maintaining a steady growth trend; apparel exports amounted to US$137.79 billion, a year-on-year decrease of 4.4%, with the decline widening. Looking ahead to 2026, with the "15th Five-Year Plan" clearly prioritizing expanding domestic demand as a strategic cornerstone, coupled with continued policy support, the textile and apparel industry is expected to gradually recover. However, the extent of this recovery will be influenced by multiple factors, such as geopolitical uncertainties, fluctuations in raw material prices, and rising labor costs.

In summary, SunSirs’ analysts believe that there will be no new PX capacity in the first half of 2026, and concentrated maintenance in the second quarter will widen the supply-demand gap, providing favorable cost support for PTA. With no new PTA capacity coming online, the industry is entering a period of production stagnation, and low processing fees are forcing out outdated capacity, reducing supply pressure. Downstream polyester, especially with the lifting of BIS certification requirements in India and the restoration of export channels, will see significant demand growth. PTA inventories will continue to decline, driving prices higher. In the second half of the year, with the weakening cost support from new PX capacity coming online and the risk of weaker-than-expected domestic and international consumption, prices may fall back and stabilize.

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