SunSirs: Facing Dual Headwinds from Costs and Demand, PTA Prices Fluctuated Downward

Amidst a dual bearish environment—pressured by both rising costs and weakening demand—the domestic PTA market exhibited a downward trend last week. According to the commodity market analysis system of SunSirs, the spot market for PTA in the East China region trended lower last week (May 18–24); the average market price stood at 6,345 RMB/ton at the beginning of the week, marking a decline of 5.33% by week's end. Consequently, PTA prices experienced volatile downward movement.

With cost-side support waning and U.S.-Iran negotiations facing setbacks, international crude oil prices have experienced significant volatility—driven primarily by geopolitical factors. As of May 21, the settlement price for the July contract of U.S. WTI crude oil futures stood at $96.35 per barrel, while the settlement price for the July contract of Brent crude oil futures was $102.58 per barrel. In the PX market, maintenance schedules for some domestic production units may be postponed; meanwhile, maintenance plans for downstream PTA plants are highly concentrated, and polyester manufacturers have signaled an intention to further reduce production. Market sentiment regarding demand remains cautious, and weak market confidence is weighing on prices, dragging the market trend downward.

Regarding PTA production facilities themselves: as of May 22, the industry's operating rate stood at approximately 60%. Domestic facilities are currently undergoing a mix of restarts and scheduled maintenance; while a small number of additional units are still slated for maintenance, the overall maintenance cycle is nearing its conclusion. Nevertheless, domestic supply is expected to remain relatively tight in the short term. Specifically, Ningbo Taichim's 1.2 million-ton-per-year PTA Unit #1 restarted on May 9, while its 1.5 million-ton Unit #2 was shut down on May 10 and has not yet restarted. Jiatong Energy's 3 million-ton-per-year PTA Unit #2 was shut down on May 20, with a restart date yet to be determined. Hengli Huizhou's 2.5 million-ton PTA Unit #1 was shut down on May 10, and its restart date remains unconfirmed. Yisheng Dalian possesses a total PTA production capacity of 6 million tons per year; of this total, the 2.25 million-ton Unit #1 is scheduled to restart in late July, while the 3.75 million-ton Unit #2 is scheduled to undergo technical upgrades during the same period.

Downstream polyester and weaving operations remain sluggish; operating rates in the Jiangsu and Zhejiang regions, for instance, hover at only around 50%. Resisting high prices, buyers are currently limiting their purchases primarily to immediate, essential needs. Domestic sales within the downstream textile sector are weak, and demand for new orders is lackluster. While the market currently retains a backlog of seasonal replenishment orders yet to be delivered, the outlook for securing subsequent orders appears unlikely to improve in the near term. Downstream apparel manufacturers are showing low interest in placing orders for new Autumn/Winter collections; compounded by an inventory buildup in upstream and downstream fabric sectors, a confluence of factors is collectively constraining any potential increase in factory operating rates. The traditional "peak season" has failed to materialize as expected, and the recovery in demand has fallen short of forecasts.

Analysts at SunSirs believe that with tensions between the U.S. and Iran easing and purchasing activity among Asian refineries remaining sluggish, oil prices are unlikely to sustain a significant upward trend, resulting in diminished cost support. While the PTA market is currently in a maintenance cycle—leading to substantial contractions in supply—maintenance units are scheduled to gradually resume operations starting in June, suggesting a marginal easing of supply conditions. Meanwhile, the traditional off-season for the downstream textile sector persists, with market activity driven primarily by essential demand. Consequently, the central price level for PTA is projected to continue its downward shift.

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