PTA inventory to pile up again in September

PTA plant operating rate recovered to 79.1% on August 25 after some PTA units restarted gradually from late August and Yisheng New Materials lifted the operating rate of the 3.6 million tons/year PTA unit to 80% yesterday. Honggang Petrochemical, Sanfangxiang and Zhongtai Chemical plan to restart their PTA units by the end of the month and the PTA plant operating rate is estimated to increase to 85% then.

Meanwhile, Yisheng and Hengli’s PTA contract supply is also recovering. Hengli cuts the contract supply by 20%, while Yisheng resumes full supply in September.

PTA contract supply of Yisheng and Hengli

For the demand, polyester polymerization rate dropped to 87.5% on August 25. In September, some polyester plants cut the output earlier may resume normal operation and the polyester polymerization rate may slightly recover to 90%.

PTA market is temporarily supported by the rebound in crude oil, although the demand from polyester plants reduces and the supply increase. However, the profit margin has been squeezed with the tight supply easing. In September, there are no maintenance plans on PTA units announced, so PTA inventory is expected to increase again. If the orders of end market remains sluggish, which restrains the recovery of polyester plant operating rate, PTA profit margin may be compressed further.