Supply Maintains Contraction, Boosting PTA Prices in China

April 19th, news:

Commodity market analysis system, this week (April 13-17) the PTA spot market in East China showed a slight upward trend, with the average market price at the beginning of the week at 6,597 CNY/ton, an increase of 4.12% from the start of the week.

Supply has become the core supporting factor for the market. In April, the industry enters a concentrated maintenance season, with large-scale capacities of Yisheng, Hengli, and Ineos undergoing maintenance. Major companies' large facilities are gradually shutting down for maintenance, reducing the industry's operating load from 85% to around 70%. Additionally, with no new PTA capacity added in China in 2026, the industry's supply continues to contract, and social inventory shifts from accumulation to destocking, providing bottom support for prices.

The advancement of U.S.-Iran negotiations will gradually reduce the geopolitical premium, potentially leading to higher crude oil and PX costs stabilizing at elevated levels before trending downward. As of April 16, the settlement price for the May contract of U.S. WTI crude oil futures was $94.69 per barrel, while the settlement price for the June contract of Brent crude oil futures was $99.39 per barrel.

Demand is in the traditional low season for textiles, with insufficient foreign trade orders from the terminal. Looms in Jiangsu and Zhejiang are operating at only 60-70%. Although the polyester sector maintains an 80% operating rate, finished product inventories are accumulating. Enterprises are mainly purchasing PTA based on rigid demand, and the high price of raw materials is facing difficulties in being passed down to the downstream, dragging down the market trend due to weak demand.

Analysts believe that in the short term, China's PTA supply is expected to remain reduced, with little change in the downstream polyester sector, mainly characterized by rigid demand procurement. The reduction in social inventory is expected to increase. Additionally, there are many uncertain factors in the Middle East situation, and raw material supply remains tight, providing continued support on the cost side.

Additionally, Xianhuotong shows that the 10-day moving average of PTA has recently crossed below the 20-day moving average, though the range has narrowed somewhat, indicating upward momentum is building.

But from a positional perspective, it is at a high level in the past year and has also been relatively high recently. Subsequently, close attention should be paid to the progress of plant maintenance, the speed of inventory depletion, and changes in the geopolitical situation in the Middle East. If textile orders pick up during the peak season in May, prices are expected to rebound.