PTA Peak Season Market Fails to Materialize! Why Are Downstream Industries Suffering Losses Despite Lucrative Upstream Profits?

The ‘Golden September and Silver October’ period has always been a highly anticipated peak season for demand in the chemical and textile industries. In previous years, at this time, downstream weaving and texturing factories were busy preparing materials, scheduling orders, and competing for production capacity. This year, however, the industry chain has encountered a typical ‘reverse market’—the PTA market has not only failed to see peak season sales but has instead fallen into a predicament of inventory accumulation and price pressure. Several industry insiders have indicated that this year’s ‘Golden September’ peak in the PTA industry chain has been disproven, with the core issue being the continued divergence between strong support on the cost side and weak recovery on the demand side.

Looking upward, international oil prices remain high due to external disturbances, keeping PTA costs firmly supported; looking downward, downstream textile orders have yet to pick up, showing weak demand. Polyester companies caught in between have fallen into a loss-making dilemma and can only proactively reduce load and cut production. On the eve of the holiday, the comprehensive operating rate of texturing facilities in Jiangsu and Zhejiang dropped to 57%, the comprehensive operating rate of weaving machines fell to 54%, and the comprehensive operating rate of printing and dyeing rose to 69%, with some small and medium-sized weaving enterprises already shutting down early for maintenance. In the past, downstream sectors would collectively restock in September, resulting in smooth market production and sales; this year, however, production and sales are generally sluggish, with enterprises focusing mainly on fulfilling existing orders and reducing inventory, essentially abandoning peak-season stockpiling—the traditional peak-season market has completely failed.

After concentrated maintenance in the earlier period, the PTA unit was restarted in September, and supply continued to be released. The months-long destocking trend has officially come to an end, and the industry has formally entered a period of inventory accumulation. As of now, PTA social inventory has risen to 1.1 million tons, with nearly 90,000 tons accumulated in a single week. Senior analyst Han Bingbing of Rongda Futures estimates that from the end of August to the present, the polyester chain operating rate has fallen from 81.52% to 74.52%, while the PTA operating rate has increased from 58.26% to 72.2%—a decline in demand coupled with a rebound in supply has intensified contradictions along the industrial chain, and market trading sentiment has noticeably cooled.

The most intuitive feature of the PTA industry chain this year is the uneven distribution of profits. Yu Tianyu, head of Zhongji Petrochemical Polyester, summarized it as ‘upstream-driven, downstream pays’: factors such as tight PX supply, increased need for oil adjustment, and tight spot PTA liquidity provide considerable profit margins for the upstream sector; however, insufficient terminal order growth during the peak season and difficulties in clearing polyester products leave the downstream sector with little incentive to replenish inventory. Dai Yumin, General Manager of the Olefins Division at Yuanda Energy Chemical, similarly pointed out that stable cost support upstream and continuous negative feedback downstream mean that each time costs rise, it further suppresses the willingness of the terminal market to place orders.