As July 2025 progresses, China's PTA prices continue their downward trend, dropping 2% in the third week, despite rising crude oil feedstock costs. This decline is primarily due to an oversupplied market. New capacity, including a 3.2 million tons/year plant, and the restart of maintenance-idled units in July have significantly boosted supply, with the industry operating at high rate. Simultaneously, demand is weak as the downstream polyester sector enters its off-season, with polyester producers facing cuts and textile companies reducing output and relying on inventory due to slumping foreign trade orders and a weaving industry operating below 56%. This supply-demand imbalance is expected to keep PTA prices bearish.
As July 2025 begins, Purified Terepthalic Acid (PTA) prices in China continued their downward trajectory, despite an upward trend in feedstock crude oil prices, a factor that typically supports higher PTA costs. The key drivers behind this price slump are a significant increase in supply coupled with a weakening demand from downstream sectors, creating an oversupplied market that lacks sufficient positive catalysts.
According to ChemAnalyst, the downstream polyester production facilities may reduce their production rate, which would cause PTA prices in China to further drop in the following weeks.
In light of the present market conditions and dynamics, PTA prices in China have persisted in the 2% downward trend that was noted during the third week of July 2025. On the supply side, there has been a significant influx of material into the Chinese PTA market. In July, a number of PTA production units that had been out of commission for maintenance from March to June have now started up again. After a period of destocking, this capacity restart has resulted in a noticeable rise in spot availability.
The start of trial operations for a new PTA production facility in East China that will produce 3.2 million tons annually is adding to this increase in supply. Prices are under a lot of lower pressure as a result of the market's inability to handle the enormous increase in the nation's total PTA capacity.
The PTA industry's overall operating rate is currently around 80%, which suggests strong production levels that are causing inventory to build up.
At the same time, the downstream polyester market is starting its customary off-season, and PTA demand has drastically declined. The market's transaction center of gravity has shifted lower as a direct result of this declining demand. As a result, downstream purchasers only make purchases to satisfy strict, immediate demand, and excitement for raw material procurement, including PTA, remains somewhat tempered.
Several textile companies have been forced to lower their production rates due to increasing pressure from inventory accumulation and slow capital turnover. A notable reason for this slowdown is a noticeable decline in foreign trade orders, which forces these businesses to concentrate on clearing out their current stockpiles rather than putting in fresh orders for raw materials like polyester and, consequently, PTA.
The weaving industry, a critical end-user, is also experiencing damaged demand, marked by high inventory levels, a persistent lack of new orders, and ongoing financial losses, causing their operating load to decline significantly.
