Purified Terephthalic Acid (PTA) prices in China fell down during mid-April 2025 due to a significant drop in the feedstock crude oil. For the first time in the last three years, PTA prices have dropped to multi-level lows. Oil prices lowered for the last two weeks amid rising tensions between the US-China tariff trade war with fears of escalating global recession weighing on market fundamentals.

Key Takeaways:

• Drop in crude oil prices significantly affected PTA market.
• Due to escalating tariff-trade tensions, oil prices plunged in mid-April which declined the manufacturing costs of PTA.
• Low demand from the downstream polyester and plastic sector dampened PTA consumption.

As per our database, PTA prices are likely to recover in May 2025 due to a foreseen increase in upstream crude prices. Moreover, demand from the downstream plastic and polyester sectors could increase due to seasonality.

While doing the recent assessment, PTA prices in China were down by 14.2% in just two weeks of April 2025 due to a tumble in upstream crude oil prices. This oil price decline was a consequence of escalating tariff tensions between the global economic powerhouses, China and the United States, which heightened fears of a global economic slowdown and consequently reduced the anticipated demand for oil. Additionally, OPEC+'s decision to increase crude oil production further contributed to the price downturn. This significant drop in the upstream prices significantly lowered the manufacturing costs of PTA.

While the operating rates of PTA were running at 80-82% of capacity, inventory levels were more than enough which led to oversupply in the market. Moreover, East China's main port inventories increased by around 3% as port arrivals intensified during mid-April 2025.

Additionally, with impending tariffs, the downstream textile fabric orders decreased in volume and the terminal demand from the downstream polyester market was low. Since the beginning of this year, the demand side has been relatively weak, and the operating rate of downstream weaving enterprises has not performed as well as in the same period of previous years. Moreover, the inventory pressure of downstream polyester fiber factories has continued to increase which further suppressed PTA demand.

As per the data, the proportion of China's textiles and clothing sector exported around 22% to the USA. Following the announcement, the tariff policy has negatively impacted the textile and clothing companies. Meanwhile, Polyester fiber companies were already planning production cuts for April due to low demand dynamics, and the recent tariff issues are likely to worsen the negative impact on demand.