Strong costs, sluggish demand, PTA market price fluctuating at high levels

Since mid March, the domestic PTA market has shown a high volatility trend. According to the Commodity Market Analysis System of Business Society, as of April 3, the spot price of PTA in East China was 6771 yuan/ton, up 2.59% from March 15.

From a cost perspective, PTA prices have always been driven by strong upstream raw materials, which is the core factor supporting its high-level operation. Recently, the international crude oil market has been affected by the tense geopolitical situation in the Middle East, with oil prices fluctuating at high levels and the bottom of the cost side continuously rising. On April 2nd, the settlement price of the May WTI crude oil futures contract in the United States was $111.54 per barrel, and the settlement price of the June Brent crude oil futures contract was $109.03 per barrel. At the same time, the Asian PX market is entering a concentrated maintenance season, with supply remaining tight and PX prices remaining firm, further driving up PTA production and processing costs.
Under the pressure of high costs, the processing fees in the PTA industry have been continuously compressed, and the profit margins of some production enterprises have narrowed, forcing large factories to actively reduce their production and burden, forming a two-way support between costs and supply, effectively curbing the space for a significant decline in PTA prices. Top enterprises have successively lowered the operating load of their equipment, with an overall operating rate of around 78% in the industry. The market circulation of goods has tightened, and favorable conditions continue to be released on the supply side.
The downstream polyester industry of PTA has weak terminal orders, and there has been no significant rebound in demand for textile and clothing foreign trade and domestic sales. Polyester factories and weaving enterprises have high finished product inventories, which puts great pressure on capital turnover. Their willingness to purchase high priced PTA is relatively low, mainly for small orders of essential needs. Some polyester factories have even passively reduced production, and their operating load has gradually decreased, resulting in poor transmission of demand for PTA and making it difficult for PTA prices to continue to rise unilaterally.
Business analysts believe that the trend of cost side crude oil and PX remains the dominant factor. If the geopolitical situation continues to be tense and PX supply remains tight, PTA prices will continue to receive strong support. However, the demand for terminal textiles has not yet recovered, and the upward space for prices will be limited. It is expected that the PTA market will continue to maintain a high and wide range oscillation trend in the short term.