Shouchuang Futures: Cost loosening, PTA futures price center of gravity shifting downward

In the spot market, the East China PTA spot price is 6,830 yuan/ton for pickup, up 55 yuan/ton from the previous trading day. For March, the main port delivery contract is quoted at a 05 discount of 60–70; the offers are around a 75 discount. For April, the main port delivery contract is quoted at a 05 discount of around 45; the offers are around a 50 discount.

On the supply side, as the PTA processing spread has been significantly compressed, some plants are operating at reduced rates. Fujian Baimeng’s 2.5 million-ton PTA unit has been reducing its load to 90% since the 16th; Fuhaichuang’s 4.5 million-ton load has been cut from 80% to 50%. At present, geopolitical factors have little impact on PTA plants. In March, there are not many PTA turnaround plans, and it is expected that PTA will continue in an inventory-accumulation state.

On the demand side, downstream polyester operating rates and terminal weaving starts are gradually recovering. Prices of polyester products are fluctuating sharply; terminal gray fabric prices are therefore rising, but the mainstream gray fabric specifications continue to run at a loss. Polyester production and sales are on the weaker side, and polyester product inventories are rising rapidly, which may curb the upside for polyester operating-rate improvements.

In short, there is no major change in PTA supply, and the industry continues to build inventories. Some negative feedback from the terminal has started to show up. It is expected that in the short term, PTA futures prices will mainly trade weakly in a range, and attention should be paid to the cost-side price trend, changes in plant operating rates, and the pace of downstream start-ups. (CICC Futures)