NOACY Futures: Cost-side Bearish Impact, PTA Expected to Weaken

February 27, 2025 08:43

Overnight, PX prices were weak and volatile. The current PXN spread is around $211 per ton. In terms of supply, PX production for the week was 758,500 tons, unchanged from last week. The domestic PX capacity utilization rate was 90.44%, also unchanged from last week. Facilities have been operating steadily recently. In terms of demand, the current PTA operating rate is 79.02%. PTA production for the week was 1,377,800 tons, down 55,200 tons from last week and up 27,600 tons from the same period last year. The domestic PTA weekly average capacity utilization rate is 79.14%, down 3.19% week-on-week and down 3.94% year-on-year. The PX-naphtha price spread is at a low level. With stable PX supply and some PTA facilities planning maintenance, there is an expectation of weakening PX supply and demand. Crude oil prices have fallen to the lower end of the range, testing support levels, and PX is expected to follow the cost-side trend.

Overnight, PTA prices were weak and volatile. The current PTA processing margin is around 232 yuan per ton. In terms of supply, the PTA operating rate is 79.02%. PTA production for the week was 1,377,800 tons, down 55,200 tons from last week and up 27,600 tons from the same period last year. The domestic PTA weekly average capacity utilization rate is 79.14%, down 3.19% week-on-week and down 3.94% year-on-year. In terms of demand, the polyester operating rate is currently 87.24%. The polyester industry's weekly output is 1,465,500 tons, up 10,000 tons from last week, with a week-on-week increase of 0.69%. The average weekly capacity utilization rate of the polyester industry in China is 87.12%, up 0.55% week-on-week. In terms of inventory, PTA factory inventory for the week is at 5.82 days, down 0.69 days from last week and up 1.27 days from the same period last year. Polyester factory PTA raw material inventory is at 10.95 days, down 2.55 days from last week and up 2.15 days from the same period last year. This week, Hengli Huizhou is expected to restart, which will lead to a slight increase in PTA supply. Downstream polyester demand has increased, but raw material procurement enthusiasm is low. With the bearish impact on the cost side, PTA is expected to remain weak.

Overnight, ethylene glycol prices were strong and volatile. In terms of supply, the weekly output of ethylene glycol facilities was 402,400 tons, down 4.06% from last week. The domestic ethylene glycol total capacity utilization rate was 66.93%, down 2.83% week-on-week. This week, Wonen and Gulei are under maintenance, while Guanghui and Tianye are reducing their loads, and Shaanxi Coal is increasing its load. In terms of demand, the polyester operating rate is currently 87.24%. The polyester industry's weekly output is 1,465,500 tons, up 10,000 tons from last week, with a week-on-week increase of 0.69%. The average weekly capacity utilization rate of the polyester industry in China is 87.12%, up 0.55% week-on-week. In terms of inventory, as of February 24, the total MEG port inventory in East China was 709,700 tons, down 15,900 tons from the previous period. As of February 26, 2025, the domestic ethylene glycol East China total arrival volume is expected to be 129,900 tons, down 15,100 tons from last week's plan. Downstream demand has increased after the holiday, and the port inventory pressure is expected to ease. This week, Fude and Wonen are expected to restart, leading to an increase in domestic ethylene glycol supply. With insufficient supply-demand dynamics and weak cost-side performance, ethylene glycol is expected to remain stable.

Overnight, short fiber prices were weak and volatile. The current short fiber sales rate is 82.19%, up 12.64% from the previous trading day. In terms of supply, the weekly output of polyester short fiber was 142,800 tons, down 2,900 tons week-on-week, a decrease of 1.99%. The average capacity utilization rate was 74.32%, down 1.51% week-on-week. This week, Xinjiang Zhongtai and Yuanfang restarted, while Yihua reduced production, and Xianglu continued to shut down. In terms of demand, the average sales rate of polyester short fiber factories for the week was 69.71%, up14.12% from the previous period. The average operating rate of the pure polyester yarn industry is 67.4%, up 17.4% week-on-week. In terms of inventory, as of February 20, the inventory of polyester short fiber factories in China was 14.15 days, down 0.07 days from the previous period. The average raw material inventory for pure polyester yarn was 10 days, down 0.15 days week-on-week. This week, Huaxing and Zhuocheng, among others, are expected to restart, leading to an increase in short fiber supply. Downstream operations have increased, but procurement is cautious. The short fiber processing fee is being squeezed, and short fiber prices are expected to remain weak and volatile.