PTA exports may not rebound, contract negotiations in deadlock

According to customs statistics, the import volume of PTA in November 2022 was 20,100 tons, a year-on-year increase of 42%; the export volume of PTA was 214,000 tons, a year-on-year decrease of 19.5%. This is also the fifth consecutive month since July that PTA's export volume has remained at around 200,000 tons. Judging from the current export situation, it is expected that the export volume in December will not improve significantly.

In addition to mainland China, the export volume of Taiwan also showed a downward trend in the second half of the year. The cumulative export volume from January to November was 914,000 tons, a year-on-year decrease of around 4%. Due to the reduced demand, starting from the second half of the year, the maintenance time of some PTA units in the region was extended and some units lowered the operating rate. FCFC's 700,000-ton PTA plant has been shut down since early September, and may restart in next March; OPTC's 500,000-ton PTA plant has been shut down at the end of October, and may restart at the end of January; the operating rate of CAPCO's 700,000-ton PTA plant has dropped to 80%.

Judging from the situation of several major PTA exporting countries, the export volume in the second half of the year also declined to varying degrees. South Korea's export volume decreased slightly, with a peak of 169,000 tons in August and a drop to 132,000 tons in November, mainly due to the reduction in demand from Turkey, Saudi Arabia, Oman. Thailand's export volume has decreased significantly, from a maximum of 120,000 tons in July to 70,000 tons in October, mainly due to the reduction from India, Turkey, Pakistan, Indonesia, South Africa. In Europe, the export volume of Belgium, Portugal, and Poland decreased, mainly due to the decrease in demand from Turkey, Spain, Germany.

Due to the suppression of demand, it is difficult for the export volume of PTA to rebound greatly. The USD PTA long-term contract negotiations are still deadlocked, and some bids have reduced to around PX link+70~75 or ICIS- (this year’s long-term contract will be around PX link+100 or ICIS+). The price difference between local and import/export markets next year will be smaller than this year, which may also affect the enthusiasm for exports. However, compared with foreign PTA producers, domestic PTA producers have an advantage in production costs. If more foreign PTA producers reduce production, it will be beneficial to China's PTA exports.