What changes to occur in PTA plant operation after profit recovery?

In recent weeks, PTA market continued to "display resilience", with spot prices fluctuating around 5800-5900yuan/mt. As production costs have trended downward, the spot processing margin for PTA has exceeded 450yuan/mt, reaching a new high since June. The improvement in PTA processing margin was mainly due to the shifts in the strength and weakness of various products in the polyester industry chain. With the restart of PX plants after the maintenance, PX supply has increased. Coupled with the contraction of gasoline cracking spreads following the end of the peak gasoline consumption season, PX-naphtha spread was compressed. At the same time, as the seasonal peak for polyester approaches its conclusion, the gradual accumulation of polyester product inventories has compressed profitability. While the PTA supply-demand structure remains reasonably balanced. In the short term, supported by macroeconomic sentiment, PTA processing margin moderately recovered.

With the restoration of the PTA processing margin, what changes are anticipated in the operational status of the units? Currently, it appears that PTA plant shutdowns/operating rate reduction is quite concentrated. In November, OPSC, Yisheng Ningbo, and Sinopec Yizheng have already shut the units for maintenance. Furthermore, Yisheng New Materials has cut the operating rate unexpectedly, contributing to a PTA plant operating rate that has declined to 74%.

Yisheng still has annual maintenance plans for some of its PTA units, including Yisheng Ningbo's No.3 unit, Yisheng Hainan, Yisheng New Materials' No.2 unit, and Yisheng Dahua. Although there have been rumors of maintenance in the market recently, considering the current processing margin is still acceptable and polyester polymerization rate provides some support, the implementation of maintenance remains to be tracked.  

In the future, Yisheng Hainan's 2.5 million-ton new PTA unit has started production as planned in November. Hanbang's 2.2 million-ton PTA unit is expected to start production around the end of this week. Energy Investment's 1 million-ton and Ineos' 1.1 million-ton PTA units are expected to restart by the end of November. Consequently, the PTA plant operating rate is expected to gradually increase next week. If there are no other changes in unit operations, it is estimated that the operating rate will increase to above 80% by the end of the month, and the PTA supply is expected to remain relatively ample. However, if there is an increase in polyester shutdowns in the later period, PTA plant maintenance may follow suit.