According to the Commodity Market Analysis System of Business Society, the domestic PTA spot market slightly increased this week (December 18-24), with a market price of 5874 yuan/ton in East China as of December 24, an increase of 2.83% compared to the beginning of the week. Enhanced cost support combined with reduced supply of PTA itself has boosted the PTA market. Specifically:
| Gamma-PGA (gamma polyglutamic acid) |
Due to the recent regional situation, international oil prices have risen to a two-week high. As of December 21, the settlement price of the US WTI crude oil futures main contract was $74.22 per barrel, and the settlement price of Brent crude oil futures main contract was $79.16 per barrel. At present, there is still significant uncertainty in the situation in the Middle East, and the Red Sea shipping crisis may continue to disrupt the market in the short term; In addition, against the backdrop of the Federal Reserve’s upcoming interest rate cut cycle, the weak US dollar has provided long-term positive support for the oil market. However, considering the market’s concerns about the prospects of economic and energy demand, it is expected that crude oil prices will have significant volatility, with consolidation being the main trend.
From the perspective of PTA fundamentals, the recent unplanned load reduction and increased maintenance have resulted in an industry operating rate dropping to around 78%. This week, four sets of main suppliers in East China with an annual production capacity of 10.8 million tons of PTA equipment were reduced to 70% on Tuesday. At the same time, a set of 1.2 million tons of PTA equipment in the northwest was shut down this Wednesday. Unplanned PTA equipment was reduced in load and the supply of parking PTA was reduced. However, from next week’s perspective, there are still many load increasing devices, and there are currently no other planned large-scale PTA device maintenance. Therefore, the impact of PTA’s main supplier’s load reduction on the supply of goods is limited, and the overall supply of PTA’s goods will still be sufficient next week.
Downstream polyester production has remained stable around 86%, but as the end of the year approaches, orders from the terminal weaving industry have decreased. Considering the gradual weakening of polyester and terminal demand support, the overall accumulation pressure of polyester products is significant. Moreover, downstream factories lack confidence in the future market and have a strong mentality of purchasing raw materials on dips. The operating rates of terminal texturing, weaving, and printing and dyeing have partially declined, and the comprehensive operating rate of Jiangsu and Zhejiang weaving machines has dropped to around 73%. If orders continue to decrease, there is a strong expectation of “reducing burden”.
Business Society analysts believe that short-term international oil prices may fluctuate and adjust slightly, which still provides support for PTA costs. Secondly, polyester production may decrease next week, weakening support for PTA demand. In the short term, downstream demand will further decline, and the fundamentals of sufficient PTA supply are weak and difficult to improve. The market has expectations for sufficient PTA supply. Therefore, under the game of cost advantage support and weak supply and demand fundamentals, the high operating points of the current two markets are still constrained, and it is expected that there is not much room for PTA to continue to rise.
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