Supply and Demand Expectations Gradually Weakening, PTA Prices Tend to Remain Weak

January 17 news

Commodity market analysis system, since January, the PTA market in China has shown a weak adjustment. As of January 17, the spot price of PTA in the East China region was 5019 CNY/ton, a decrease of 1.17% from the beginning of the month.

Recently, PTA units in China have been both restarting and undergoing maintenance. The 3,000,000 ton unit of Dushan Energy restarted on January 14th, while the 3,600,000 ton unit of Yisheng New Materials was shut down on January 14th. The 1,250,000 ton unit of Zhuhai BP was also shut down on January 16th. Overall, the operating rate has decreased to around 75%.

As geopolitical premiums fade and inventory pressures mount, international crude oil prices plunged, ending a five-day rally. On January 15, the settlement price of the March contract for U.S. WTI crude oil futures was reported at $59.08 per barrel, down $2.80, or 4.5%. The settlement price of the March contract for Brent crude oil futures was reported at $63.76 per barrel, down $2.76, or 4.1%.

Downstream polyester producers are reducing production seasonally around the Chinese New Year. After the concentrated fermentation of news about polyester production cuts, a new round of filament production cuts has begun (major filament manufacturers have decided to implement continuous production cuts for a quarter starting from January 14, with a reduction of 15%). As a result, PTA traders' willingness to hold inventory has weakened.

And the overall atmosphere for new orders in the terminal weaving sector remains poor. At the beginning of the month, driven by the rise in crude oil and costs, some customers with low inventory or intentions to stock up on raw materials for after the Chinese New Year proceeded to purchase raw materials. The overall sentiment is still cautious, maintaining just-in-time procurement for raw materials.

Analysts believe that the supply and demand expectations for PTA are gradually weakening, with significant inventory accumulation pressure in February. It is expected that PTA prices will mainly follow the fluctuations of raw materials in the short term.