PTA prices fluctuated downward in 2024, How will it be in 2025?

According to the Commodity Market Analysis System of Shengyi Society, the domestic PTA price fluctuated downward in 2024. As of December 31, the average market price in East China was 4790 yuan/ton, a decrease of 19.22% from the beginning of the year.

 

It can be roughly divided into four stages:

 

From January to early July 2024, PTA prices showed an overall range of fluctuations. Although crude oil surged and fell in the first half of the year, it provided some upward support for PTA costs. With the new production capacity put into operation, PTA supply is abundant. Combined with weak demand performance, downstream procurement maintains essential demand. Under the game of strong cost and weak supply and demand, the PTA price range is consolidating.

From early July to early September, the center of gravity of crude oil prices shifted downwards, and under the multiple pressures of continuous release of new PTA production capacity and supply-demand imbalance, PTA prices experienced a significant decline, with a drop of over 22%.

 

From early September to early October, driven by favorable macroeconomic and crude oil conditions, the PTA price center of gravity significantly recovered upwards, with an increase of over 11%.

 

From early October to December, crude oil rose to the high point of the range and then fell back again. Demand improved but did not have sustainability, and PTA new production capacity was released. Under multiple negative factors, PTA prices adjusted weakly.

 

Compared with 2023, the price trend in the first half of the year is basically consistent, but there is a significant differentiation in the second half of the year. In 2024, there will be a significant decline, and as of the end of the year, it will be at a low level in nearly three years.

 

Looking ahead to 2025:

 

In terms of production capacity, PTA will add 7.5 million tons of new capacity in 2024. As of the end of 2024, the total PTA production capacity will reach 86.02 million tons, with a capacity growth rate of 6.7%. At the same time as adding new production capacity, the process of phasing out outdated production capacity has begun. Some new facilities have stronger cost competitiveness, and some old small-scale long-term shutdown facilities have been phased out. The centralized operation of large-scale PTA plants has promoted the survival of the fittest in the industry, and competition will become increasingly fierce.

 

It is expected that the PTA production capacity will increase by 8.7 million tons in 2025, with a capacity growth rate of 9.9%, and the pressure of growth will be greater than in 2024.

 

In terms of production, the domestic PTA production in 2024 was 71.8 million tons, an increase of 7.58 million tons compared to 2023, with a production growth rate of 11.8%, higher than the capacity growth rate, mainly due to the improved utilization rate of PTA production capacity in 2024. Thanks to the high downstream polyester production, the annual industry average operating rate of PTA is around 82%. The equipment that will be put into operation at the end of 2024 will release production from early next year, and it is expected that the pressure of supply increment will continue to increase in 2025.

 

PTA inventory statistics in recent years

 

From the inventory perspective, PTA inventory in 2024 is significantly higher than in recent years. During the downstream polyester off-season in the first quarter, PTA continued to accumulate inventory, and the maintenance season in the second quarter eased the pressure of accumulated inventory. However, with the restart of the plant and the sluggish polyester peak season, PTA has returned to the accumulation stage. It is expected that by 2025, due to the pressure of PTA production and high operating rates, the pattern of accumulated inventory is likely to be maintained.

 

Gamma-PGA (gamma polyglutamic acid)

PTA exports will perform well in 2024, with an estimated annual export of around 4.5 million tons, a year-on-year increase of approximately 1 million tons. Mainly due to the growth of exports in Southeast Asia and the Middle East, such as India’s temporary relaxation of BIS certification control in the third quarter of 2024 due to PTA shortage, the export volume surged in July and September, contributing approximately 200000 tons. At present, China’s exports to Southeast Asia and the Middle East are still increasing to a certain extent. However, Türkiye and India have plans to put devices into production in 2025, and the export volume is expected to decline.

 

In terms of cost, in 2024, under the influence of geopolitical, macro, and supply and demand fundamentals, international crude oil prices have emerged from a trend of rising and falling, gradually fluctuating and narrowing. Oil prices have gradually returned to fundamentals, with Brent crude oil falling by 3.58% and WIT crude oil falling by 1.09% throughout the year. The supply-demand balance in 2025 will transition from a tight equilibrium state to a balanced state, mainly based on the current production capacity, combined with moderate growth in future US crude oil supply, and the absence of more intense geopolitical conflicts, taking into account the risk premium. Therefore, the upward range of oil prices is suppressed, and major institutions are relatively pessimistic and conservative about oil prices in 2025.

 

In 2024, the overall PX price showed a downward trend of “sideways, sharp decline, and oscillation”. As of the end of the year, the average price of PX factories in China was 7108 yuan/ton, a decrease of 17.35% from the beginning of the year. The cost support provided by the rise in crude oil prices in the first half of the year, as well as the consolidation of the market under the game of supply and demand contradictions. Subsequently, the collapse of cost support caused by the heavy decline in crude oil and the sluggish demand for oil blending intensified the supply-demand contradiction by switching to aromatics production, resulting in a significant weakening of PX prices. In the fourth quarter, due to the start of annual contract negotiations, there was a strong sense of caution in the market, resulting in slight price fluctuations and consolidation.

 

Starting from the second half of 2023, PX will enter a production vacuum period, and there will be no new production capacity added in 2024. However, due to the higher growth rate of downstream PTA demand for PX in China, the industry’s annual production capacity rate has increased to a relatively high level of 86%. The growth rate of PX production capacity in 2025 is still relatively low. There is only one set of equipment in China with a total production capacity of 3 million tons. After production, the total domestic production capacity will reach 46.67 million tons per year, with a production capacity growth rate of 6.9%. However, due to the lack of approval for this equipment, there is still significant uncertainty in the production time. In terms of supply, considering the current low profit pattern of the industry and the regular maintenance losses within the year, the annual supply increment is very limited. At the same time, multiple downstream PTA units are expected to be put into operation in the first half of the year, so the PX supply and demand pattern will continue to improve in 2025.

 

Downstream polyester products follow the fluctuation of raw material prices, showing a trend of first rising and then falling in 2024. Among them, polyester staple fiber (1.4D * 38mm) fell by 5.13%, polyester DTY (150D/48F low elasticity) fell by 6.87%, polyester POY (150D/48F) fell by 8.39%, and polyester FDY (150D/96F) fell by 9.86%.

 

In 2024, a total of 5.55 million tons of polyester production capacity will be added (excluding obsolete production capacity), and the total production capacity will reach 85.39 million tons by the end of the year, with a production capacity growth rate of 7.7%, which is slower than in 2023. Looking at 2025, the polyester industry will continue to have new production capacity entering, with a planned production of 5.14 million tons. It is expected that the polyester production capacity will reach around 90.53 million tons by the end of 2025, with a capacity growth rate of 6%. Compared to 2024, the overall growth rate will slow down, and the actual production capacity will be lower than the planned capacity. Therefore, the actual growth rate remains to be observed.

 

From a product perspective, the planned production of polyester filament is 1.75 million tons, and the total production capacity is expected to reach 54.33 million tons by 2025, with a capacity growth rate of 3.3%. The planned production of polyester staple fiber is 100000 tons, and the total production capacity is expected to reach 9.605 million tons by 2025, with a capacity growth rate of 1%. The planned production of polyester bottle flakes is 2.6 million tons, and the total production capacity is expected to reach 22.63 million tons by 2024, with a capacity growth rate of 12.9%. The remaining newly added production capacity is polyester film.

 

In 2024, the overall production capacity of the polyester production process is relatively large, and the output growth rate is still high. The capacity utilization rate of the polyester industry for the whole year is around 86%, which is at a relatively high level in recent years. In 2025, the growth rate of production capacity for polyester filament and staple fibers will still be relatively low, which can maintain a high level of operation. However, there may be a risk of temporary load reduction due to excessive inventory. Due to the delay in the production of multiple units from 2024 to 2025, the overall production pressure of Huanpian is still high. Coupled with low profits and high inventory, the expected production pressure has decreased.

 

In recent years, with the cost advantage of raw materials in China’s production and the partial relocation of the industrial chain in the terminal weaving process, there has been a supply gap in external weaving raw materials, resulting in a remarkable growth rate of polyester exports compared to domestic demand. From January to October 2024, polyester exports amounted to 10.42 million tons, a year-on-year increase of 13.4%. The main products exported are polyester filament, staple fiber, and bottle flakes. Among them, the cumulative export volume of bottle flakes and staple fiber will increase by more than 20% in 2024, maintaining a good growth momentum. However, the export volume of polyester filament is expected to decline by 4.5% year-on-year, mainly due to the significant increase in exports caused by early stocking under the Indian BIS certification in 2023. The trade friction may further escalate in 2025, and companies need to consider how to deal with the uncertain factors of the export situation.

 

From the perspective of the weaving process, taking into account the negative factors before the Spring Festival in 2024, the average operating rate may be around 65%, which is comparable to 2023 as a whole. From a seasonal perspective, the operating rate is relatively high from March to June. In summer, due to the influence of off-season and temperature, the operating rate decreases. After September, it enters a seasonal improvement stage, and in October, the operating rate rises to the highest point of the year. In November, it gradually enters the off-season load.

 

In terms of textile terminals, the Ministry of Industry and Information Technology announced that from January to November 2024, the industrial added value of textile enterprises above designated size increased by 4.4% year-on-year, with operating revenue of 445.205 billion yuan, a year-on-year increase of 4.2%; The total profit was 158.57 billion yuan, a year-on-year increase of 9.0%. The production of yarn, fabric, and synthetic fiber in textile enterprises above designated size increased by 0.3%, 1.0%, and 8.7% respectively year-on-year.

 

According to data from the National Bureau of Statistics, from January to November 2024, the retail sales of clothing, shoes, hats, and needle textiles in China reached 1307.3 billion yuan, a year-on-year increase of 0.4%.

 

According to the General Administration of Customs, from January to November 2024, China’s textile and clothing exports totaled 273.06 billion US dollars, a year-on-year increase of 2%. Among them, textile exports were 128.84 billion US dollars, a year-on-year increase of 4.6%, and clothing exports were 144.22 billion US dollars, a year-on-year decrease of 0.2%. The consumer market continues to heat up, with good growth in retail sales and an overall positive export situation. We need to pay attention to changes in domestic and international policies in 2025.

 

Business analysts predict that PTA prices will generally exhibit a “inverted V” trend in 2025. The pressure of self supply will continue throughout the year, becoming a resistance to the rise in PTA prices. In the first half of the year, geopolitical tensions persisted, and the Federal Reserve continued to cut interest rates. There were expectations of an increase in international crude oil prices, supported by favorable PTA costs. And with the boost of the peak demand season, PTA prices have fluctuated and risen. In the second half of the year, as PTA new production capacity gradually releases excess supply, the supply-demand contradiction will further highlight, and PTA prices will fluctuate and fall.

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