The Purified Terephthalic Acid (PTA) prices in China rebounded significantly during the first half of May 2025 amid high demand from the downstream polyester sector. Moreover, recovery in the upstream oil prices further supported the manufacturing costs of PTA. Not only the increase in production cost but also the supply of PTA was constrained due to maintenance shutdowns in China.

Key Takeaways:

• PTA prices rise as upstream oil costs increase.
• The maintenance shutdown of the PTA plant in China reduced supply availability.
• PTA inventory drop tightened the market supply.
• Increased operating rates of the downstream polyester market increased PTA consumption.
• As May began, downstream PET resins registered new orders that supported PTA demand.

As per ChemAnalyst, PTA prices in China are expected to surge further in June 2025 as demand from the downstream plastic and polyester sectors could increase due to seasonality. Elevated procurement activity from the bottled water and soft drink sectors during the summer peak could contribute to potential price hikes. Moreover, the summer season could drive the consumption of PTA as their raw material for the downstream application.

While doing the recent assessment, PTA prices in China have increased by 9.9% during the third week of May 2025 as compared to the first week of May. A rise in upstream oil prices provided cost support to PTA.

Additionally, Zhongtai, Sichuan Energy Investment, Yisheng Dahua, Honggang Petrochemical, and Taihua Xingye all went offline during a concentrated period of maintenance shutdowns, which removed a significant amount of production capacity. As a result, the PTA industry operating rate fell to its lowest level of the year, at about 72%.

Furthermore, the market dynamics were made even more restrictive by a significant decline in the overall social inventory. According to the data, the PTA's overall social inventory decreased significantly between April and May, indicating a declining supply. By May 8th, it had decreased to 13.4 days month over month reducing by 0.17 days, indicating lower inventory levels for multiple weeks in a row.

Simultaneously, downstream polyester units maintained high operating rates during the May Day holiday, fueling strong demand for PTA. Downstream polyester production and sales continued to increase before the Labor Day holiday, leading to a significant improvement in the industry. The polyester load remained at 90%, which was the highest level in the same period in the past five years.

The downstream packaging market experienced weak demand in April 2025 due to the economic downturn. However, demand for PET has improved from the downstream bottled beverage industry due to rising temperatures.