SunSirs: Market Sentiment is Pessimistic, PTA Price Fluctuates Downward

On October 28, the current price of PTA continued to fall. The average domestic market price was 5150 yuan/ton, down 3.01% from the previous day and up 52.52% year-on-year. The main futures 2201 closed at 5204, down 168, or 3.13%.

On the supply side, Chuanneng Chemical’s PTA plant with an annual output of 1 million tons was shut down on the evening of October 26. The restart time is yet to be determined, and the industry's starting load is reduced to around 82%. However, the market supply is plentiful, and the downstream polyester factories' bids are mostly hard demand, and the overall trading atmosphere is light.

The price of crude oil fell from a high level, and the support for the PTA market was weak. As of October 27, the settlement price of the main contract of WTI crude oil futures in the United States was reported at US$82.66/barrel, and the settlement price of the main contract of Brent crude oil futures was reported at US$83.87/barrel. According to a report released by the US Energy Information Administration (EIA) on Wednesday, US crude oil inventories increased more than expected last week. In addition, market rumors that Iran’s nuclear talks may be restarted are bad for the oil market.

From the perspective of downstream demand, the impact of short-term electricity still exists, and the start of polyester production has not been significantly increased and maintained below 80%. The start-up of the terminal textile enterprises remained low, the raw material inventory was sufficient, the consumption was relatively slow, the sentiment of raw material procurement was not good, the overall mentality was cautious and wait-and-see, and the prices of mainstream polyester factories in Jiangsu and Zhejiang fell steadily.

At present, the downstream demand is still weak, and the PTA market is under pressure from the accumulated structure. At the same time, the high-level shock adjustment of crude oil has limited support for the cost of the PTA market, and the market sentiment is relatively pessimistic. It is expected that the PTA price will operate in a narrow and weak range in a short time. The market outlook still needs to pay attention to the trend of international oil prices, the maintenance of its own equipment and the improvement of demand.

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