This week (June 22-28), the overall domestic PTA market maintained a downward trend, driven by the cost of crude oil. On June 28, the average price of PTA spot market in East China was 5734 yuan/ton, a decrease of 5.10% from the beginning of the week.
On the cost side, the geopolitical premium of crude oil has subsided. As of June 25th, the settlement price of the August WTI crude oil futures contract in the United States was $71.92 per barrel, and the settlement price of the September Brent crude oil futures contract was $75.50 per barrel. The geopolitical tension has cooled down, the risk of navigation in the Red Sea/Hormuz has fallen, and international crude oil prices have rapidly rebounded from high levels. Asian PX follows the weakening of crude oil, and the cost center of PTA shifts downwards.
On the supply side, there is a game of maintenance and resumption of production, with low inventory providing weak support. The production rate remains at a relatively low level around 64%, with factory inventory continuously decreasing and spot inventory being low.
On the demand side, it is still in the traditional textile off-season of June, with sustained weakness and no overall driving force. The production of weaving machines in Jiangsu and Zhejiang provinces is sluggish, the inventory of raw fabrics is accumulating, and the production and sales of polyester filament are weak. Downstream polyester factories are generally losing money and have no intention of replenishing inventory, only picking up goods as needed, with weak upward transmission. The demand for bottle flakes is slightly offsetting the weakness of filament, but it is not enough to improve overall demand.
Analysts believe that in the short term, crude oil volatility remains the dominant factor. If oil prices rebound, PTA will undergo technical repairs, while if oil prices continue to decline, they will continue to explore the bottom. Combined with weak demand during the off-season, expectations of resuming production, and a decrease in downstream losses. Under the combination of negative factors, PTA prices are mainly fluctuating weakly.
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