Core Viewpoint - The PTA spot basis experienced significant fluctuations in 2025, with a notable increase in the first half of the year followed by a decline in the second half. The average PTA spot basis for 2025 was 8 yuan/ton, up 35 yuan/ton from 2024, marking a 130% increase and a shift from negative to positive basis [2][12]. Group 1: First Half Performance - The PTA spot basis saw its largest increase since July 2023, reaching a peak in June 2025, with a reference futures contract premium of 295 yuan/ton on June 18 and an average basis of 237 yuan/ton, reflecting a month-on-month increase of 40.24% and a year-on-year increase of 717.24% [5][14]. - This surge was driven by multiple factors, including concentrated maintenance of PTA facilities from February to June, leading to inventory reduction and a seller's market during May and June [5][14]. Group 2: Second Half Performance - In the second half of 2025, the PTA spot basis declined due to a shift in market supply and demand expectations, with new PTA production capacity coming online and regional supply becoming sufficient [15]. - The new capacity included 250,000 tons starting trial runs in June and an additional 320,000 tons coming online in July and August, resulting in a significant drop in the spot basis by 84.39% month-on-month in July, coinciding with a record high production of PTA [15]. Group 3: Short-term Expectations - For January and February 2026, a seasonal decline in demand is anticipated, leading to an increase in inventory and a decrease in the spot basis. The average operating rate of terminal weaving machines is expected to drop to around 42%, a 29 percentage point decrease from the previous two months [7][17]. - It is estimated that inventory will accumulate by approximately 500,000 tons during this period, negatively impacting the PTA spot basis [7][17]. Group 4: Mid-term Expectations - From March to May 2026, a recovery in demand is expected, driven by the seasonal increase in operating rates, which are projected to rise to around 74% [8][18]. - The introduction of new polyester production capacity is also expected to boost PTA consumption, with an estimated additional consumption of 12,000 tons per month from 155,000 tons of new polyester capacity planned for early 2026 [8][18]. Group 5: Uncertainties and Market Sentiment - The average processing fee for PTA from July to November 2025 was around 200 yuan/ton, indicating potential production losses and leading to unplanned maintenance of PTA facilities, which could positively affect the spot basis [9][10][18]. - Despite expectations for a strong market in March to May 2026, the sentiment for January remains bearish due to anticipated inventory accumulation, with traders showing low confidence in December [19].

Market Overview - On October 20, PTA futures experienced fluctuations and a downward trend, with a general atmosphere in the spot market being average. The trading range for spot prices expanded, primarily driven by traders, with sporadic offers from polyester factories. October cargo was traded at a discount of 80-90, with prices in the range of 4295-4340. November cargo was traded at a discount of 70, and late November at a discount of 65. Warehouse receipts were traded around a discount of 50, with the mainstream spot basis at a discount of 85 [1]. Profitability - As of October 20, the PTA spot processing fee was around 120 yuan/ton, while the processing fees for TA2512 and TA2601 futures were 253 yuan/ton and 278 yuan/ton, respectively [2]. Supply and Demand - Supply: As of October 17, PTA operating rates were at 76%, an increase of 0.6%. - Demand: Polyester operating rates remained stable at 91.4%. On October 20, the price of polyester filament saw a slight decline, with overall production and sales being average. The significant drop in oil prices was influenced by Trump's tariff policies, leading some filament factories to lower prices or increase discounts. Downstream knitting operations were performing reasonably well, with some downstream buyers purchasing raw materials as needed. Currently, POY has some profitability, while FDY fine denier remains at a loss. With factory inventories continuing to rise, filament prices are expected to follow the downward trend of raw materials [3]. Market Outlook - With the recovery of some PTA plant operating rates and news of new installations coming online, the PTA spot basis has weakened significantly. However, as the basis approaches a no-risk arbitrage level and some major PTA suppliers reduce their operating rates, the downward space for the basis is limited. In terms of absolute prices, the weak supply and demand expectations for crude oil limit price drivers, along with the negative impact of fluctuating tariff policies. Therefore, short-term PTA price movements are expected to remain weak and fluctuate. The strategy suggests a wait-and-see approach, with attention on Brent crude oil support around 60 USD/barrel; a rolling reverse spread strategy is recommended [4].