According to the Commodity Market Analysis System of Shengyi Society, the domestic PTA market in October showed a trend of first falling and then rising. As of October 30th, the spot price of PTA in East China was 4552 yuan/ton, a decrease of 0.93% from the beginning of the month.
After the holiday, PTA market prices continued to decline. The weak macro caused by the main tariff issue, as well as the continued negative sentiment due to the production of new facilities and weak demand. In the second half of the year, as oil prices rebounded from low levels, overall commodity sentiment rebounded, and downstream purchasing sentiment increased during the traditional peak season, causing the PTA price center to shift upward.
As of October 29th, the settlement price of the December WTI crude oil futures contract in the United States was $60.48 per barrel, and the settlement price of the December Brent crude oil futures contract was $64.92 per barrel. OPEC is highly likely to maintain increased production in December, and the supply side will continue to be loose. Without significant improvement on the demand side, the supply-demand pattern is imbalanced. There has been no new progress in the geopolitical situation, so the support given to oil prices is limited.
The main factories in Northeast China have restarted their pre maintenance equipment, and the industry’s operating rate is currently around 78%. Next, the new PTA production capacity of 2.7 million tons in East China has been tested and discharged, and overall PTA production will continue to increase. In addition, if PTA companies actively reduce production under low processing fees, PTA may not accumulate inventory in November and December, which will push up the PTA market. But if the reduction in production is limited, it still cannot change the current pattern of sufficient supply.
Overall, the quality of “Silver Ten” is insufficient, and its seasonal strength is highly limited. Most of them focus on digesting raw materials and stocking up in the early stage, maintaining a strong demand for raw material procurement. After mid October, with the combination of cold weather and Double Eleven promotions, the demand for winter fabrics increased, and the end weaving orders improved. The enthusiasm of textile enterprises to replenish raw materials increased, and the inventory pressure of downstream polyester factories eased, with a load of about 87%.
Business analysts believe that in the short term, cost support and phased improvement in demand will boost PTA prices, and it is expected that PTA prices will show a strong and volatile pattern. In addition, from the analysis method of the spot market of Shengyi Society, the price of Shengyi Society has crossed the 10 day and 20 day moving averages, indicating an upward trend. But with the new PTA plant put into operation and the early maintenance facilities gradually resuming, the peak demand season is also coming to an end, and oversupply will limit the rebound height. We still need to pay attention to price fluctuations on the cost side and the actual fulfillment of terminal orders.
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