Liaoning, China: The current instability in the crude oil market is depressing the downstream industry, such as paraxylene, which serves as the raw material for Purified Terephthalic Acid (PTA). Purified Terephthalic Acid market supply exceeds its demand, resulting in a price decrease of 2.26% compared to prior weeks. Downstream polyester makers were subdued, as polyester production declined to 76%. In addition, Yisheng Ningbo, with a production capacity of 4.2 million tons of PTA plant, has increased its operating rate from 73% to 90%.

The Purified Terephthalic Acid (PTA) price reduction was mainly due to the falling Paraxylene cost in line with the shaky Crude Oil market. Downstream polyester producers still had enough Purified Terephthalic Acid availability to satisfy consumer demand. As of July 25, 2022, the WTI crude oil futures contract price was USD 93.32/barrel, demonstrating a downward trend in the cost of crude oil derivatives on the global market. Meanwhile, U.S. gasoline inventories increased, and the European Central Bank raised interest rates on concerns about falling demand.

In terms of demand, large factories intended to cut back on production even more, and polyester production fell during the considered time period. Along with the impact of sporadic demand outlook and the high summer temperatures, it is clear that we are currently in the off-season. Polyester Production is still low, Jiangsu and Zhejiang loom have dropped below 50%, and there is a general mood of market trading.

According to ChemAnalyst prediction, The regional imbalance between supply and demand can persist. However, Predicting a significant increase in terminal demand for Purified Terephthalic Acid (PTA) is challenging. Additionally, it is anticipated that the market value of Polyethylene Terephthalate (PET) bottles will decrease even further in the upcoming weeks due to the uneven demand outlook from the packaging industry. Meanwhile, due to lower cost pressure and sluggish demand from the polyester sector, the price of Purified Terephthalic Acid may decline over the following weeks.