PTA prices in China recently witnessed stabilization amid steady supply dynamics and lacklustre demand
In China, the PTA market has recently experienced price stabilization due to a combination of factors. Following the January 13th overhaul of INEOS’s 1.25 million ton PTA plant, which restarted around the mid-week of February, the operating rate in the industry remained approximately 83%. Despite the relatively high PTA social inventory and continued accumulation in February by the suppliers, the supply side remained well-stocked, with more spot goods being delivered by PTA suppliers.
Suppliers accumulated stock of PTA primarily to prepare for future demand recovery and to avoid potential supply shortages during periods of low downstream activity. Despite the high PTA social inventory and weak demand from downstream polyester factories, suppliers proactively ensured that they had sufficient stock to meet any sudden increases in demand once the market stabilized. This strategy likely stemmed from expectations of a rebound in the textile and polyester sectors, as weaving machine operating rates gradually increased. By stockpiling PTA, suppliers aimed to mitigate the risk of disruptions and position themselves to capitalize on improved market conditions in the near future.
Although the overall market saw weak fundamentals, with downstream polyester factories running at low production and sales, there were signs of gradual recovery in the textile sector. After the holiday, the operating rate of weaving machines in certain regions of China slowly increased to over 24% and continued to improve to around 60% by the last week of February. Despite this, the demand for PTA has not yet fully recovered, with the market largely in a wait-and-see state due to limited new orders and underlying financial pressures.
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The stabilization in isooctanol and n-butanol prices, along with the steady PVC plastics market, played a role in the broader raw material stability, which likely helped prevent any major price fluctuations in PTA. However, the overall demand from downstream sectors such as textiles remained subdued, and PTA manufacturers are facing a slower-than-expected recovery in orders for spring and summer.
