With the recent recovery of PTA equipment, PTA operating rates have rebounded significantly, while prices have shown signs of decline. As of August 17, the PTA spot market price closed at 5,195 yuan/ton. Judging from the current situation, as downstream polyester factories have successively begun to reduce production and load, and in anticipation of weakening demand, the industry’s mentality is slightly weak. As PTA devices gradually resumed, supply gradually increased. As demand weakened and supply rebounded, PTA prices came under pressure and fell.
Supply: Device changes are still controllable, and supply continues to rise limited. Up to now, many sets of PTA units have completed or are undergoing equipment maintenance this year. According to statistics, there are still 17.6 million tons of PTA units that have not yet been overhauled. Therefore, it is expected that the adjustability of the PTA supply side in the future market will still be strong. At present, crude oil prices are adjusting at a low level, while naphtha cracking spreads and PX-N spreads are at relatively high levels, which has certain support for PTA. At present, PTA processing fees are relatively considerable. As long as the supply of raw materials does not fluctuate significantly, PTA factories may remain stable. The initiative to start work is strong. However, the fluctuations of Yisheng’s new material equipment have always been a dream in the hearts of the industry. Since the new equipment was put into operation, the fluctuations in the start-up of the equipment have been relatively ups and downs. According to Longzhong Information, the load of the equipment is currently operating at about 30%. Taken together, the load of PTA equipment is still expected to increase in the future. However, since many large-scale equipment has not yet been overhauled and the operation of new material equipment has not yet been completely stable, we predict that it is unlikely that the overall operating rate of PTA will rise significantly in the future. The main variable on the PTA supply side in the market outlook is still changes in new material equipment.
Demand: Equipment production has been reduced one after another, and demand support is slightly insufficient. Recently, due to low polyester profits and rising inventories, polyester factories have been under pressure and some companies have begun to reduce production. Recently, some polyester companies have successively announced production reduction plans, which currently involve shutdowns and reduced production capacity of 4.536 million tons (see the table below for details). The market outlook does not rule out that other domestic companies with relatively high inventories also have production reduction plans. Polyester factories have successively reduced production, which has affected the demand for PTA to a certain extent. In addition, it is heard that downstream companies such as small and medium-sized texturing and water-jet looms are expected to decline due to the impact of high inventories. Taken together, the short-term demand for PTA from polyester has weakened, and demand-side support is slightly insufficient.
List of recent polyester production cuts
Source: Longzhong Information
To sum up, due to the impact of weak demand in the short term, the PTA market may periodically show accumulation expectations, and market prices will be under pressure. However, since the raw material price difference is still relatively high, providing certain support, although the PTA price has weakened and adjusted, the price still has some resistance to falling. It is expected that in the short term, without any obvious positive news stimulus, PTA prices may continue to be weak. </p
