After a continuous decline in the domestic PTA market in September, the bottom has recovered. According to the Commodity Market Analysis System of Shengyi Society, as of the end of September, the average market price in East China was 4612 yuan/ton, a decrease of 3.01% from the beginning of the month. Worried about the continued increase in crude oil production, the expected increase in PTA supply, and lukewarm demand, the main reason for the decline was in mid to early September. At the end of the month, the continuation of the Russia-Ukraine conflict triggered potential supply risks. Crude oil rebounded, the supply and demand of downstream pre festival stock improved, and PTA prices recovered slightly from low levels.
The crude oil market was affected by both long and short factors, with prices fluctuating widely in September. As of the 26th, the settlement price of the November WTI crude oil futures contract in the United States was $65.72 per barrel, and the settlement price of the December Brent crude oil futures contract was $69.22 per barrel. On the one hand, geopolitical factors remain one of the important factors affecting the crude oil market. The Russia Ukraine issue has led to a strong operation of the crude oil market, coupled with the Federal Reserve’s interest rate cuts benefiting the international oil market and the crude oil market. On the other hand, Saudi crude oil may increase production, leading to an increase in US crude oil inventories. In addition, with the end of the peak oil season in the US, the global economic outlook and oil demand are not optimistic, putting pressure on crude oil market prices.
In September, PTA plant maintenance and restart coexisted. Currently, the operating load of the PTA industry is around 77%, and the supply of plants has changed significantly. However, the overall spot supply is still loose, and social inventory has accumulated slightly. According to the maintenance plan, the 1.2 million ton unit of Xinjiang Zhongtai has been shut down for maintenance for two weeks starting from September 19th. The 1.1 million ton unit of INEOS Phase 2 is expected to start maintenance in mid to early October, and the Dalian unit of Hengli Petrochemical is scheduled to start annual maintenance on October 11th. In terms of new production capacity, since the beginning of this year, domestic PTA has added 5.7 million tons of production capacity, with a growth rate of 6.62%. If the 3 million ton plant of Dushan Energy Phase 4 is put into operation as scheduled in October, the total production capacity growth rate of the PTA industry will further increase to 10.11%, and the market supply pressure will further increase.
At the end of the month, due to the pre holiday impact, some downstream polyester factories made up small amounts of inventory, and local production and sales rebounded. Currently in the traditional peak consumption season of “Golden September and Silver October”, the downstream polyester market has not seen the expected significant rebound in demand, and the overall market performance is flat, with limited support for upstream PTA prices. Terminal orders have moderately rebounded, but the order volume is average and constrained by high inventory status. Weaving factories are cautious in purchasing raw materials such as polyester filament, mainly in small quantities.
Business analysts believe that the weakening of cost support and the continued deployment of new PTA production capacity have intensified market concerns about oversupply. The downstream replenishment before the National Day holiday has basically ended, and the loose supply pattern will continue thereafter. It is expected that PTA prices will continue to operate weakly in October.
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