According to the Commodity Market Analysis System of Shengyi Society, the domestic PTA spot market in February first rose and then fell. As of February 27th, the average price of PTA in the East China region was 4967 yuan/ton, a decrease of 0.5% from the beginning of the month. In the first half of the month, some PX facilities reduced their load and shut down, which boosted the strong rise of PX and boosted PTA. Subsequently, with the easing of the geopolitical situation in Europe and the decline in international crude oil prices, the support for PTA costs weakened, and demand recovery fell short of expectations, which negatively impacted PTA prices.
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Looking at the future, under the low processing fees, PTA factories will undergo more maintenance. At the end of February, the PTA industry’s operating rate was around 79%. In March and April, some units will still be under maintenance, including a 2.2 million ton production line in Northeast China scheduled for maintenance on March 1st, a 1.2 million ton PTA unit in East China scheduled for maintenance in March, a 1.5 million ton PTA unit scheduled for maintenance in May, and a 2 million ton PTA unit in South China scheduled for shutdown and maintenance in April.
On the cost side, the unexpected increase in US refined oil inventories in the crude oil market indicates that the expectation of weak demand will not change, coupled with the pressure on oil prices brought by the Ukraine Russia peace agreement. As of February 26th, the settlement price of the main contract for WTI crude oil futures in the United States was $68.62 per barrel, and the settlement price of the main contract for Brent crude oil futures was $72.07 per barrel. Further attention needs to be paid to tariff policies, OPEC+production plans, etc., as the oil market is likely to continue to fluctuate widely.
On the one hand, the PX market is affected by fluctuations in crude oil prices, and on the other hand, from the perspective of supply and demand fundamentals, there is a concentrated maintenance plan for PX facilities in Asia in the second quarter, and some short process facilities may continue to operate with reduced production. Due to the pressure of processing space, there is a possibility of expanding the maintenance scale of PTA on the demand side, and the prospects for the supply and demand pattern are not optimistic. However, the expected increase in demand for oil blending may have a temporary boost effect on the PX market. The expectation of reduced supply and demand pressure drives market confidence to rebound, and prices are expected to run stronger.
On the demand side, downstream polyester production and sales recovery did not meet expectations, and there were not many new orders in the terminal textile industry. The finished inventory of various polyester products continued to rise, which suppressed the increase in polyester production and negatively affected the market mentality. As of the end of February, the operating rate of the polyester industry was 84%. The slow issuance of new orders for domestic and foreign trade, coupled with difficulties in negotiating new orders, has led to a cautious attitude towards the recovery of demand in March, which has dampened market confidence.
Business analysts believe that with mixed long and short news in the oil market, prices will experience wide fluctuations and adjustments. As the downstream polyester industry gradually enters the traditional peak demand season, production may further increase, and the demand side may improve or drive PTA prices up.
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