PTA market after holidays
In early May, when China and Japan were on long holidays, crude prices were bullish and costs of feedstocks of purified terephthalic acid (PTA) including paraxylene (PX) rose as well. Along with this, the PTA market has been on an uptrend after the holidays. But demand is not strong and the rise in the market is limited.
As lockdown is gradually easing in Europe and the US, the crude market is rebounding. The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries are carrying out production cuts from May 1 and this is also a bullish factor.
Regarding supply of PTA, Ningbo Liman's 700,000mt/year PTA facility was recently shut down due to troubles and at Jiangyin Hanbang's 600,000mt/year PTA facility, operations were lowered because of malfunctioning. This facility might be shut down going forward for maintenance. On the other hand, Shanghai Petrochemical's 400,000mt/year PTA facility was initially scheduled to enter maintenance from May 6 but it was postponed to May 16. Operating rates of the facility are at about 84% at this moment.
On the demand side, polyester makers have maintained normal operations after the holidays but they have already secured stocks adequately and are not moving to buy PTA aggressively. On the other hand, COVID-19 is still spreading outside China and the US-China trade war continues. Because of this, demand for end products is unclear. Further, export orders for fibers are still few and demand is not expected to recover in the short term. Under this situation, the rise in the PTA market is curbed.