The geopolitical risks in the Middle East have decreased, oil price premiums have fallen, and the increase in US crude oil inventories has affected investor confidence. On February 21st, international crude oil futures plummeted, with the settlement price of the main contract of WTI crude oil futures in the United States at $70.40 per barrel, a decrease of $2.08 or 2.9%. The settlement price of the main Brent crude oil futures contract was $74.43 per barrel, a decrease of $2.05 or 2.7%.
Cost support weakened, and the domestic PTA market fell on February 24th. The average market price in East China was 5036 yuan/ton, a decrease of 1.09% from the previous trading day. The closing price of PTA main futures TA2505 was 5058 yuan/ton, a decrease of 90 yuan/ton, a decrease of 1.75%, with a settlement price of 5074 yuan/ton and a daily increase of 4230 lots.
In terms of self supply, two sets of PTA plants with a total capacity of 5 million tons in southern China were shut down for maintenance as planned in mid February. Some PTA plants were restarted this week, and there is sufficient stock supply. And recently, PTA’s main suppliers have delivered more spot goods, resulting in a significant increase in spot circulation.
Downstream polyester factories have low production and sales, and PTA demand has not recovered as expected, so the overall fundamentals are still weak. Currently, most terminal factories have resumed work and production, and the weaving operation rate in Jiangsu and Zhejiang is around 60%. However, due to factors such as limited new orders, funding issues, and manpower shortages, the textile market has started slowly overall. In terms of orders, orders for spring and summer after the holiday did not meet expectations and are mostly in a wait-and-see state. There are no obvious signs of large orders being placed for spring and summer, and weaving manufacturers have fewer new orders.
Business analysts believe that from a cost perspective, the market is concerned about the progress of geopolitical negotiations, and international oil prices may continue to fluctuate, which will dominate the PTA price trend. Under the low processing fee, attention still needs to be paid to unplanned PTA plant maintenance. With the arrival of the “Golden Three Silver Four”, it is expected that the demand for textile and clothing essential orders will gradually increase slowly, and it is expected that PTA prices will maintain a volatile pattern in the short term.
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