China's PTA exports shrink in Q3

According to customs statistics, the export volume of PTA in September was 236.7kt, still at a low level despite of a month-on-month increase of 20%. The export of PTA in the third quarter was 726.3kt, a decrease of 369.1kt or 34% from the second quarter.

In China domestic market, PTA spot market liquidity has shrunk recently and the PTA margin has improved, so the export willingness weakened. In August and September, PTA inventory lowered by 450kt, and the spot/TA2301 spread rose from a premium of 200yuan/mt to 1,000yuan/mt. The average PTA margin in September was restored to 850yuan/mt, slightly better than that in USD market.

On the other hand, overseas demand for PTA has decreased significantly. From the perspective of major destinations, China’s PTA exports to India and Turkey have fallen sharply. The polyester polymerization rate in India remained low, and the PTA inventory was high, so the demand for PTA imports weakened; In Europe, the demand for PTA also reduced as PET bottle chip producers cut the output under high energy cost.

Judging from the export of South Korea and Taiwan, China, the export volume of South Korea and China Taiwan has not expanded due to the reduction of China's exports, especially the export volume of China Taiwan has shown a significant decline. The export volume in the third quarter was only 196.4kt, a month-on-month decrease of 147.6kt or 43%. Therefore, more PTA units in Taiwan were shut for maintenance in the third quarter to ease the inventory pressure.

The oversupply pressure gradually increases in PTA market and China still need to export PTA later. Pay attention to whether there is a seasonal rebound in overseas demand later and the maintenance of overseas PTA units.