On May 9th, the CZCE market witnessed a strong rebound in international oil prices

On May 9th, the CZCE market witnessed a strong rebound in international oil prices, with polyester raw materials leading the way in terms of price increases. Specifically, PX closed with a rise of 2.28% and PTA climbed by 1.96%. The return of U.S. crude oil prices to the $60 mark overnight provided some support to the cost side. Currently, PX processing fees remain low, and production facility loads have been reduced. Moreover, the downstream market continues to reduce inventories, which has given a boost to the polyester raw material sector.

In the upstream PX segment, following the Qingming Festival, the domestic PX cracking spread was significantly compressed due to a sharp decline in costs and weak downstream demand. By the end of April, the PX and naphtha cracking spread had reached a near four-year low for the same period. Against this backdrop, and with the arrival of the spring maintenance season, both domestic and international PX facility operating rates have seen a high-level adjustment. However, as we enter May, with the resumption of previously shut-down PX facilities, there is an expectation of an increase in domestic production.

Recently, several PTA facilities have been undergoing maintenance or have plans to do so. The overall load of PTA is expected to remain relatively low. As of May 8th, the domestic PTA overall operating rate stood at 70.3%, a drop of 7.4 percentage points compared to the previous week, and significantly lower than in recent years for the same period. It is anticipated that the PTA supply and demand situation will remain tight throughout May, providing strong support for prices.

Prior to the May Day holiday, there was a concentrated price reduction and promotion for filament and staple fibers. As a result, polyester end-inventory, especially filament inventory, has seen a significant decline. Recently, the inventory turnover days for POY have decreased by 8.4 days to 16.6 days, FDY inventory turnover days have dropped by 3.7 days to 26.9 days, and DTY inventory days have fallen by 3.2 days to 27.7 days. The promotion has significantly alleviated the inventory pressure on polyester manufacturers. Additionally, the post-May Day recovery of the Jiangsu and Zhejiang terminal operating rates has been better than expected, potentially nullifying the previously anticipated negative feedback from the terminal market.

NOACY Futures believes that the recent improvement in the macroeconomic atmosphere, coupled with the domestic polyester load unexpectedly rising to a historical high for the same period, has effectively guaranteed the direct demand for PTA. The market is expected to maintain a strong momentum in the near term.