June 28th, news:
Commodity market analysis system, this week (June 22-28) the PTA market in China generally maintained a downward trend, following the cost-driven movement of crude oil. On June 28, the average spot price of PTA in the East China region was 5734 CNY/ton, a decrease of 5.10% from the beginning of the week.
On the cost side, the geopolitical premium on crude oil has subsided. As of June 25, the settlement price for the August contract of U.S. WTI crude oil futures stood at $71.92 per barrel, while the settlement price for the September contract of Brent crude oil futures was $75.50 per barrel. With geopolitical tensions easing and the risk of disruptions to shipping through the Red Sea and the Strait of Hormuz receding, international crude oil prices have rapidly retraced from their previous highs. Asian PX prices have followed crude oil lower, causing the cost center for PTA to shift downward.
On the supply side in China, there is a tug-of-war between maintenance and resumption of production, with low inventory providing weak support. Among them, Hengli Petrochemical's 4# 2.5 million ton facility was shut down on April 9 and is planned to restart soon. Dushan Energy's 3 million ton facility was shut down on June 24, and Fuhai Chuang's 4.5 million ton facility was shut down on June 25. Dongying Weilian's 2.5 million ton facility is scheduled to shut down at the end of June. The operating rate remains at a low level of around 64%, with factory inventories continuously decreasing and spot inventories being low.
On the demand side, it is still in the traditional textile off-season in June, with continued weakness and no driving force throughout. The operation of weaving machines in Jiangsu and Zhejiang remains low, and the inventory of gray cloth is accumulating, with weak production and sales of polyester filament. Downstream polyester factories are generally operating at a loss and have no intention to replenish inventory, only purchasing as needed, unable to drive demand upstream. The modest rigid demand for bottle chips slightly offsets the weakness of filaments, but it is not enough to improve overall demand.
Analysts believe that in the short term, crude oil volatility remains the dominant factor. If oil prices rebound, PTA will experience a technical recovery; if oil prices continue to fall, PTA will continue to bottom out. Additionally, weak demand during the off-season, expectations of production resumption, and downstream losses leading to reduced load factors all contribute to a combination of negative factors. Under these circumstances, PTA prices are expected to remain weak and volatile.
Additionally, according to Xianhuotong, the 10-day moving average has crossed below the 20-day moving average, and the difference between the two averages continues to widen in a negative direction. The 10-day and 20-day moving averages are diverging further, indicating that the PTA market is entering a downward channel.
