Both Cost and Demand Weaken, PTA Prices Remain Stagnant and Consolidate

November 26 News

According to the commodity market analysis system, the recent PTA market in China has been consolidating at a relatively high level over the past two months. As of November 26, the PTA spot price in the East China region was 4,654 CNY/ton, up 0.20% from November 10.

From the cost perspective, despite OPEC+’s latest round of production increases, the market remains concerned about the risk of long-term supply surplus. The regional situation has eased somewhat, and coupled with weakening demand in the U.S., ongoing U.S. tariff issues are weighing on the global economy and dampening demand expectations, thereby driving down international oil prices. As of November 25, the settlement price for the January contract of U.S. WTI crude oil futures was $57.95 per barrel, down $0.89, or 1.5%. The settlement price for the February contract of Brent crude oil futures was $61.80 per barrel, down $0.92, or 1.5%.

From the perspective of supply and demand, recently, Yisheng Ningbo's 2.2 million tons PTA unit was shut down on November 20, and Honggang Petrochemical's 2.5 million tons PTA unit was shut down on November 17 and restarted on November 26. Currently, the operating load of PTA is around 72%, with multiple units under maintenance. As some short-term maintenance units are completed, there is some pressure on supply.

New polyester units downstream have been commissioned one after another, while maintenance schedules for some existing units have been postponed once again. As a result, supply in China’s polyester industry has increased. However, due to the slow ramp-up in capacity utilization at new plants, the operating rate of the polyester industry has remained stable around 87%. The end-market demand has begun to show initial signs of cooling. Currently, weaving factories in the Jiangsu and Zhejiang regions are still largely relying on previously secured orders to sustain their production pace; meanwhile, new orders are gradually weakening, putting increasing pressure on these factories and reducing their enthusiasm for raw material procurement.

Analysts believe that cost support is relatively weak, and PTA supply will gradually recover. India has canceled the BIS certification for polyester filament, and China's exports of polyester filament and textiles are expected to improve, but the domestic consumer market is weak, leading to cautious expectations for a recovery in subsequent orders. Therefore, overall, PTA lacks the momentum to continue rising.