PTMEG price touching bottom again due to collapsing cost

It has been mid-Nov now, but effective discussing price failed to emerge on PTMEG market as buyers and sellers still held looking-on mindset. With weakening demand, price of PTMEG dropped in Nov and the sales volume of PTMEG also reduced.

Softening demand was the major reason for weakening PTMEG market. The operating rate of fabric mills decreased more in Nov when new orders failed to chase up and earlier orders came to an end with the pass of traditional peak season. Downstream players are cautious in production, worrying later demand. The Spring Festival is in late-Jan, 2023. The production of orders for spring and summer will be longer than previous years after the Spring Festival holiday. With cautious mindset and falling prices of chemical fibers, factories show low production activity. Therefore, fabric mills witness faster reduction of run rate. In addition, as some big fabric and apparel wholesale markets in China such as the Gungzhou Zhongda Market are under lockdown amid the spread of pandemic, some plants start cutting or suspending production in advance.

Rigid demand for spandex diminished. With the approaching of Spring Festival holiday, spandex plants show higher intention to control production and inventory before holiday. Coupled with decreasing BDO price, spandex companies reduce purchasing PTMEG.

The launch of some PTMEG projects which plan to expand capacity is delayed. In addition to weaker demand, PTMEG produces see pressure from sales and price again.

BDO price has been close to the earlier low but demand lacks strong support. Price of PTMEG is expected to reduce more. The settlement price of PTMEG is more likely to be lower than 20,000yuan/mt and the price in recent two months may be more close to the earlier low. As a consequence, increasing PTMEG factories may scale down production at the end of Q4 in 2022.