Running Status of PTA in H1, 2017

Introduction: The average operating rate of China’s PTA industry was 71.60% in H1, 2017, which was up 5.39% from 66.21% in H1, 2016.

The Chinese PTA market in 2017 is better than expected. After the Chinese New Year, the PTA market was boosted by the sudden shutdown of PX units in Japan and South Korea and extensive maintenance in Q2, 2017. The processing cost was stable in the range of RMB 500-600/mt. PTA producers showed high interest in producing. However, the PTA market then went down and some producers started to operate at a loss. Some units underwent maintenance in Q2, 2017. The average operating rate of PTA in H1, 2017 was 71.60%, which was down 5.39% from the same period of 2016.

Based on the amount of loss from 2015 to 2017, the loss in Q1, 2017 was not as high as that in 2015 and 2016. But the loss in Q2, 2017 was much higher. From January to June 2017, the loss reached 1,075kt, up 145.8kt from the same period of 2016 and down 392.5kt from 2015.

In H1, 2017, the downstream operating rate remained high, being around 80%. The demand for PTA will be firm. Moreover, the units at Shaoxing Yuandong Petrochemical and Xianglu Petrochemical were shut, and the supply of PTA will not be too high. However, with the restart of some PTA units, and PTA market will became weak. Furthermore, the polyester market will enter the offseason. It is predicted that the PTA market will be soft in the long term.