PTA market shifts to oversupply in April

The local control measures have been gradually upgraded under the outbreak of Covid in China. The logistics has been blocked and demand has plummeted. PTA supply reduced largely since April as several PTA units have been shut or lowered the operating rate unexpectedly. However, the decline in polyester polymerization rate was more quickly. In addition to the pressure of high product inventory and cash flow losses, polyester factories are facing the tight supply of raw materials. After the production cut plans implemented, the polyester polymerization rate is estimated to drop below 82%. And due to the uncertainty of the epidemic spread, most polyester factories do not have a clear time of resume production.

PTA market gradually shifts to oversupply in April. Based on average polyester polymerization rate of 83%, PTA inventory may accumulate 50-100kt in April.

PTA port inventory moves up

From the perspective of inventory structure, PTA stock of polyester plants continued to reduce due to hampered logistics. Polyester plants may further lower the operating rate if there is no improvement in the logistics. PTA port inventory gradually moved up. In addition, some PTA producer and polyester plants also sold PTA on spot market recently.