The slight surge in crude oil has pushed up the PTA market. According to the Commodity Market Analysis System of Shengyi Society, the average market price in East China this week (October 21-25) was 4953 yuan/ton, an increase of 1% from the beginning of the week.

The crude oil market is affected by the tense geopolitical situation in the Middle East, and on the other hand, crude oil supply remains tight. The OPEC+2.2 million barrels per day production reduction before the end of November will still be effective, and some oil producing countries have stated that they will carry out compensatory production cuts. Supply shortages still exist, and international crude oil prices are rising. In addition, the improvement of the local economy in Asia, the easing of market panic on demand, and the reduction of US crude oil inventories have supported the oil market. As of October 23rd, the settlement price of the main contract for WTI crude oil futures in the United States was $70.77 per barrel, and the settlement price of the main contract for Brent crude oil futures was $74.96 per barrel.

From the perspective of PTA itself, the rise lacks a solid foundation. In terms of supply, a long-term shutdown of a 2 million ton PTA plant in East China is planned to restart in November, and the plant will be shut down in January 2024. In mid December, a new production capacity of 2.7 million tons is planned to be put into operation in East China. The restart of PTA old facilities and the planned production of new capacity will accelerate inventory accumulation. At the same time, end buyers have not continued to purchase in large quantities, resulting in a lack of substantial positive supply and demand, and PTA prices continue to rise weakly.

The demand side is approaching the end of the traditional peak season, and the factory shipment situation has not improved yet. The operating rate of the polyester industry is around 88%. There are fewer market orders, lower market trading enthusiasm, fewer inquiries, and a strong wait-and-see attitude to consume inventory. As we enter the end of October, there is no sign of improvement in the textile terminal market, and enterprise inventory may show a trend of accumulation, leading to increased shipping pressure. New orders are scarce, foreign trade orders are few, and inventory shows a trend of accumulation.

Business analysts believe that there is uncertainty in the geopolitical situation, and concerns about crude oil supply are fluctuating. Therefore, oil prices may continue to fluctuate, providing support for PTA costs. However, the PTA factory has a low intention for equipment maintenance, and the supply of goods is still abundant. In addition, the seasonal peak season for terminal textiles is coming to an end, and there is limited room for improvement in the future. Overall, PTA supply and demand are weak, and it is expected that prices may fall.