The domestic PTA spot market stopped falling and stabilized, showing a slight upward trend last week. As of August 27, the average market price was 5,010 yuan/ton, up 0.92% from the beginning of the week and up 39.48% year-on-year. The trend of futures prices was basically the same. As of August 27, the settlement price of the main contract was 5,000 yuan/ton. In terms of supply, some PTA units are planned to be restarted next week, including Hailun Petrochemical 1.2 million tons, Honggang Petrochemical No. 1, 1.5 million tons, and Zhongtai Chemical's 1.2 million tons PTA plants are planned to restart. The current industry operating rate is over 79%, and the installation load is expected to further increase. If the supply of September contract goods is provided on a regular basis, the tight spot situation in East China is expected to be eased.
The international oil price trend rose last week, and the current settlement price of the main contract in the US WTI crude oil futures market was reported at US$67.42 per barrel. At the beginning of the week, it rose for three consecutive trading days, equalizing the decline in crude oil last week. The main influencing factor was the American Petroleum Institute (API) data showing that US crude oil and refined oil inventories fell last week, and the U.S. Energy Information Administration (EIA) Wednesday Routinely announced inventory data shows that crude oil inventories have fallen for the third consecutive week, pushing oil prices to continue to rise, but the spread of the epidemic has also put pressure on crude oil prices, and the closing price on Thursday has fallen. On the whole, it has formed a certain favorable support for the PTA cost side.
However, the downstream polyester production and sales are generally flat, and the demand for PTA has weakened, restraining the rebound of the PTA market. The current operating rate of the polyester industry is around 83%. After the load of mainstream factories has declined, the enthusiasm for PTA spot purchases is not high, which leads to a sufficient supply of PTA and a trend of accumulation of inventory. The textile terminal orders are insufficient, and the recent orders for autumn and winter clothing and home textile fabrics lack bright spots. Some factories have stopped selling inventory mainly, and the market trading atmosphere has become more and more muted.
The new PTA installations are being started up one after another, and the operating rate of the installations will increase and the supply side will increase. In the short term, the terminal weaving market is unlikely to improve significantly, and polyester factories continue to reduce production. It is expected that PTA will gradually enter the stockpile. Superimposed on the volatility and weakening trend of crude oil storage, there are more negatives in the PTA market, and the price is likely to weaken next week. It is still necessary to pay attention to the oil price and the progress of polyester production reduction.
