SunSirs: Fundamentals are Negative, PTA Prices in the Chinese Market will Continue to be Weak

From November 22 to 26, the domestic PTA market rose first and then fell, with a weekly decline of 0.25%, an increase of 43.02% year-on-year, and a 7-week consecutive decline. Yisheng Petrochemical and Yisheng New Materials announced the November PTA (tentative) settlement price of 4,920 yuan/ton; Hengli Petrochemical’s November PTA settlement price of 4,959.95 yuan/ton.

In terms of equipment restart and overhaul coexist, the current operating rate of the PTA industry is around 82%. Specifically, Chuanneng Chemical’s 1 million ton plant was shut down on October 31 and may be restarted at the end of November; Hengli Dalian’s 2.2 million ton plant was overhauled on November 5 and restarted around November 21; Ineos (Zhuhai) 110 The 10,000-ton plant is scheduled to be overhauled for 2 weeks at the end of December. The 2.5 million-ton plant of Baihong plans to start overhauling for 3 weeks on December 1.

Crude oil prices have fallen, and the support for PTA costs has weakened. As of November 26, the settlement price of the main contract of WTI crude oil futures in the United States was reported at 78.39 US dollars/barrel, and the settlement price of the main contract of Brent crude oil futures was reported at 82.22 US dollars/barrel. The downstream polyester industry's operating rate is around 83%. It is reported that on November 25th, many mainstream polyester factories in China reached a consensus to implement a 20% production reduction plan based on the current output. The plan will be implemented in the past two days, and the follow-up will depend on market conditions. Or increase production reduction efforts to 25%. In terms of prices, polyester filament prices have shown a continuous downward trend in the past month, with various products falling by 15-17%.

The PTA market has sufficient supply, and the spot is still surplus. Downstream polyester factories are reducing production, and demand is expected to decline. Superimposed on the adjustment of the high price of crude oil fluctuating and falling, on the whole, there are more negative fundamentals, and it is expected that the short-term PTA price will continue to be weak.

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