Qiu Qianqian, JLC Chemical

The relatively strong market trend

In the third quarter of 2023, China's PTA market had a relatively strong development trend in overall, experiencing a decline after mid-September. In the third quarter, the average spot price at the main port in East China was RMB6 007.5 per ton. The highest price, reaching RMB6 430 per ton, occurred on September 15, while the lowest price was RMB5 630 per ton on July 4 (see Figure 1).

Figure 1 The trend of PTA spot prices in the East China market from 2022 to 2023

Supply increases but demand changes little

In mid-July 2023, a new 2.5 million-ton PTA unit in Hengli Petrochemical (Huizhou) Co., Ltd. came on stream. As of the end of September, China's PTA production capacity was increased to 79.165 million t/a.

Table 1 shows the fundamental data of China’s PTA for the third quarter of 2023. During this period, domestic PTA kept a high level of operating rate. Due to the operation of new downstream polyester units and the high operating rate, the rigid demand was stable. The operating rate of China's PTA averaged 81% in the third quarter of 2023, an increase of 10.53 percentage points from the same period in 2022. The output of PTA in the third quarter of 2023 was approximately 16.881 million tons, marking a 3.611 million-ton increase over the same period in 2022 (refer to Figure 2). Table 2 shows the maintenance of China's PTA units in the third quarter of 2023.

Note: The production capacity data is the total national production capacity as of the month. The output, operating rate, import volume, export volume, and profit are all monthly average data. Inventory refers to the port inventory as of the end of the month, while demand is apparent consumption.

Figure 2 Comparison of China’s PTA output VS operating rate in 2022-2023

Imports shrink, exports increase

China still imported a small amount of PTA in the third quarter of 2023. According to statistics, the import volume of PTA in the third quarter of 2023 was approximately 2 300 tons. Figure 3 shows the trend of China’s PTA import volume from 2022 to 2023.

Figure 3 The trend of China’s PTA import volume from 2022 to 2023

In the third quarter of 2023, the export volume of China's PTA remained high, but experienced a significant decline from the previous quarter. Statistics indicate that the export volume in the third quarter of 2023 was approximately 737 600 tons. Figure 4 shows the trend of China’s PTA export volume from 2022 to 2023.

Figure 4 The trend of China’s PTA export volume from 2022 to 2023

High operating rates of downstream polyester and a decline in bottle-grade PET

In the third quarter of 2023, the operating rate of China's PTA downstream polyester remained high, averaging 89.67% (see Table 3).

Note: The operating rates of each product are monthly average data

In the third quarter of 2023, the profit of downstream polyester was average (see Table 4), among which bottle-grade PET suffered heavy losses. In terms of polyester, month-on-month data shows that profits in the third quarter improved compared with the previous period. Fiber-grade PET products had slight profits. The profit of fiber-grade PET declined this quarter under the pressure of the contradiction between supply and demand.