PTA: Overcapacity bears a long road

Since October, the market price of purified terephthalic acid (PTA) has continued to fall under the oversupply of fundamentals

At present, the limited orders in the terminal weaving industry will restrict the further release of demand for polyester and even PTA, adding to the fact that the new PTA production capacity has been put into production in recent years.

Steady increase in supply

"With the weakening of the energy consumption'dual control' and the curtailment policy, the domestic PTA weekly operating rate returned to more than 80% at the end of October, and the pressure on the inventory reappeared

In mid-to-late September, under the influence of energy consumption "dual control" and power curtailment policies, Honggang Petrochemical, Jiaxing Petrochemical, Hengli Petrochemical, Yangzi Petrochemical, Yisheng New Materials and other companies continued to overhaul or reduce production, leading to the start of the PTA industry.

"From the perspective of the market outlook, the overall PTA oversupply pattern may continue

Tired library status continues

Chen Zhixiang also believes that, due to the limited impact of power restrictions and terminal orders, the overall starting load of the polyester industry is lower than the level of the same period in previous years

From the current point of view, entering the winter, the terminal weaving industry has reached the peak season for winter equipment and goods, and there is a seasonal pick-up in the starting load, and with the steady increase in power supply, the starting load of polyester enterprises is also expected to rise to a certain extent

"From a macro point of view, the slowdown in the global economic recovery has led to weak external demand in the apparel industry, which is transmitted to the PTA market to show a continuous accumulation of inventory

Centralized production capacity outbreak

More importantly, the PTA industry has entered a period of concentrated outbreaks of new production capacity, which will also restrain the market from rising

Since last year, the new production capacity of leading PTA companies including Hengli Petrochemical Phase IV and Phase V 5 million tons/year capacity and Xinfengming Phase II 2.

In January this year, Fujian Baihong’s 2.