Cost support weakens, PTA prices fluctuate downward

April 14 news

With the easing of tensions in the Middle East and the waning of crude oil premiums, China’s PTA prices have recently experienced a rapid pullback. According to the commodity market analysis system, as of April 14, the spot price of PTA in the East China region stood at 6,392 CNY per ton, down 7.79% from a week earlier.

The cost side remains the core driving factor. Fluctuations in crude oil prices directly impact market sentiment. On April 8, the international crude oil market experienced an epic plunge: both WTI and Brent crude oil prices fell below the round psychological level of $100 per barrel. WTI’s daily price decline exceeded 16% in a single day. The primary drivers were the temporary ceasefire between the U.S. and Iran, the rapid restoration of expectations for navigation through the Strait of Hormuz, and the unexpected buildup of U.S. crude oil inventories. As a result, the market focused on unwinding the premium previously paid for geopolitical risks, causing both crude oil and refined product futures to plummet simultaneously. Currently, prices have rebounded slightly after the initial correction.

In April, the industry enters the spring maintenance phase, with leading enterprises' facilities gradually shutting down. The industry's operating rate has dropped to around 80%. Large-scale maintenance of PTA facilities in China is expected to reduce supply, making the supply side relatively strong. Inventory is entering a destocking channel, and the tight raw material supply situation continues in April. Some facilities may still undergo unplanned maintenance, and the tight circulation of spot goods provides support for prices. Moreover, with no new PTA capacity added throughout the year, the long-term pressure of oversupply has disappeared.

On the demand side, performance remains relatively weak. Currently, the textile industry is in its traditional off-season, with insufficient foreign trade orders. In the Jiangsu and Zhejiang regions, weaving mills continue to operate at low capacity utilization rates. In the polyester segment, there’s a buildup of finished-product inventories and rigid demand-driven procurement, which is creating significant negative feedback on high-priced PTA and thereby limiting room for price increases. However, as industries such as soft drinks gradually ramp up production and previously accumulated inventories are steadily digested, demand will experience a moderate recovery. Starting from May and June, we’ll gradually enter the traditional peak consumption season, during which restocking demand is expected to pick up, potentially bringing the supply-demand balance into a tight equilibrium. Nevertheless, if raw material prices remain persistently high, downstream purchasing intentions could still be restrained, leaving uncertainty about the extent of demand improvement.

Looking ahead, according to SpotCom, the current 10-day moving average of PTA has crossed below the 20-day moving average, indicating a downward trend.

And from a positional perspective, it has been at a low level in the past 30 days, but at a medium to high level over the past year. A downward trend in PTA prices may form. It is still necessary to closely monitor the progress of PTA plant maintenance, crude oil trends, and the recovery of downstream demand during the peak season in China.