Costs Weakened Significantly, and the Center of PTA Prices Shifted Downward

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Due to a marked decline in costs, the domestic PTA market saw a downward shift in price levels last week (June 15–21). According to the SunSirs commodity market analysis system, the average spot market price for PTA in East China stood at 6,116 RMB/ton as of June 21, representing a 5.51% drop from the beginning of the week.

International oil prices have trended downward; as of the 17th, the settlement price to the July contract of U.S. WTI crude oil futures stood at $76.79 per barrel, while the settlement price to the August contract of Brent crude futures was $79.55 per barrel. Expectations regarding U.S.-Iran reconciliation and the reopening of the Strait of Hormuz continue to gain traction, likely leading to a further unwinding of the geopolitical risk premium; consequently, oil prices are expected to remain evaporative with a bearish bias as the market weighs the pace of the shipping lane's reopening against the timing of actual increases in crude oil supply.

Regarding supply, Dushan Energy’s 2.5-million-tonne No. 1 unit restarted on June 15, bringing the sector operating rate to around 87%. Dongying Weilian’s 2.5-million-tonne unit is scheduled to shut down at the end of June, and Yizheng Chemical Fibre faces expected maintenance due to technical issues, leading to a contraction in supply; meanwhile, downstream polyester units undergoing maintenance are expected to restart. Consequently, sector inventories continue to decline, providing support to market prices.

Major downstream manufacturers of filament yarn have maintained their earlier coordinated production cuts; currently, the operating rate to direct-spun filament stands at 73%, a new low to this time of year. Looking ahead, there are plans to restart units at polyester vegetation—such as Shenghong and Hanjiang—next week, with no immediate expectations to shutdowns, suggesting a slight increase in domestic polyester supply. Meanwhile, operating rates among downstream end-market manufacturers have seen a modest rebound, raising expectations to seasonal restocking in the near future.

Analysts at SunSirs believe that the PTA market is currently facing weakening costs, a slow recovery in supply, and a lack of significant improvement in demand; consequently, market conditions are expected to remain generally weak in the short term.

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