September 12 news
Commodity market analysis system, in September, the PTA market in China showed a trend of fluctuation with a stronger bias. As of September 11, the average price of PTA in the East China region was 6971 CNY/ton, an increase of 9.10% from the beginning of the month.
The core driver of this round of PTA price increase mainly relies on the favorable cost end of crude oil. Recently, international crude oil has been fluctuating strongly due to geopolitical situations. As of September 10, the settlement price of the US WTI crude oil futures contract for October was reported at $102.48 per barrel, and the settlement price of the Brent crude oil futures contract for November was reported at $107.63 per barrel. This provides favorable support for both the spot and futures prices of PTA in China.
On the supply side, the PTA market has been continuously clearing inventories in the earlier period, resulting in relatively tight spot supplies. Coupled with processing margins remaining within a reasonable range, this has effectively supported market prices and prevented a sharp decline in the market trend. As most of the PTA units undergoing maintenance in September gradually resume operations and increase their production rates, the industry’s overall operating rate is steadily rising, and market supply is gradually becoming more relaxed. The previous pace of inventory reduction has slowed down, and it is expected that from mid-to-late this month, the market will shift from inventory reduction to a state of supply-demand balance or even a slight accumulation of inventories.
On the demand side, the peak “Golden September” season fell short of expectations. Coupled with high raw material prices that have constrained end-user order demand, downstream textile orders have been slow to follow, and rigid demand procurement has remained weak. As a result, polyester enterprises at the downstream end are operating at low capacity utilization rates, and some polyester chip factories have scheduled maintenance. Consequently, polyester capacity utilization is set to decline further, raising doubts about meeting peak-season demand expectations and making it difficult to sustain the upward price trend for PTA.
Analysts believe that in the short term, PTA will continue to show a relatively strong trend within a range, with the cost end remaining the core influencing factor, providing solid support. However, weak demand is limiting the potential for price increases. As market supply continues to increase and peak season demand fails to materialize as expected, the upward space for PTA will be further constrained. Without a strong driver from a significant rise in crude oil prices, it will be difficult for the market to break out of its range-bound pattern. Overall, the market will exhibit a "strong near-term, weak long-term" trend. Subsequent focus should be on the fluctuations in crude oil prices, changes in plant operations, and the implementation of terminal polyester orders in China.
