June 16 News
The geopolitical issues in the Middle East have eased, leading to a significant weakening of crude oil prices. Poor cost support has resulted in a substantial decline in the PTA market. According to the commodity market analysis system, on June 16, the spot price of PTA in the East China region of China was 6,127 CNY/ton, a decrease of 5.34% from the previous trading day.
On Monday, June 15, the crude oil market saw a sharp decline, with prices of both major crude oil futures contracts falling sharply in tandem. The July contract for U.S. WTI crude oil closed at $80.75 per barrel, down $4.13, or 4.9%. The August contract for Brent crude oil closed at $83.17 per barrel, down $4.16, or 4.8%. This marked a new low in three months, continuing the downward trend from last Friday. The primary driver behind this drop is the substantial easing of geopolitical tensions between the U.S. and Iran—specifically, the signing of a memorandum of understanding between the two sides and growing expectations that shipping through the Strait of Hormuz could soon resume. As a result, the risk premium supporting oil prices has rapidly diminished. However, from a fundamental perspective, this short-term pullback does not signify the complete resolution of the energy supply crisis. In the medium to long term, oil prices will continue to face multiple competing forces and uncertainties.
On the supply side, PTA operating rates have been fluctuating but are now trending upward, with current PTA utilization reaching around 68%, resulting in a slight increase in market supply. Specifically, Taiwan Petrochemical’s 1.5 million-ton facility resumed operations on June 10, while another 1.2 million-ton unit is scheduled for maintenance shortly thereafter. Yisheng Hainan’s 2.5 million-ton facility has been shut down since June 4. Dushan Energy (850101) has restarted one 2.5 million-ton PTA unit, while its other 3 million-ton PTA unit is operating at 50% capacity and will be shut down at an opportune time. Shandong Weilian plans to halt operations of its 2 million-ton PX and 2.5 million-ton PTA facilities starting June 25 for a 45-day maintenance period. As some previously idled units resume production, the pace of PTA destocking in June has slowed somewhat, though destocking is expected to continue in July.
On the demand side, major downstream polyester filament and staple fiber producers continue to cut production in order to maintain prices. At the weaving end, there are signs of improvement in both procurement and sales, with the utilization rate of spandex weaving machines in the Yangtze River Delta region rising for two consecutive weeks. Although terminal demand remains weak, weaving companies’ raw material inventories have fallen to historically low levels, creating expectations of restocking. However, foreign trade orders remain weak, and export prospects for textiles and apparel to Europe and the U.S. are generally moderate. As a result, market sentiment is cautious, making it difficult to sustainably drive procurement activity.
Analysts believe that with the short-term cost focus shifting downward and no significant improvement in the demand during the off-season, prices will continue to adjust with a bias towards weakness.
Additionally, according to Xianhuotong, the 10-day moving average is trending downward below the 20-day moving average, and the difference between these two averages continues to narrow positively, indicating that the PTA market has entered a downtrend.
Combining the 5-level position, the current price is at a relatively high position in the past year in China, and one needs to be cautious of the downside risk.
