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].

Core Viewpoint - The PTA market is experiencing a potential peak phase, influenced by both cost support and inventory reduction, but is facing downward pressure from falling crude oil prices and rising inventory expectations for January-February 2024 [1][3][4]. Group 1: Market Dynamics - Recent PTA prices reached a high not seen since early September, driven by cost support and inventory reduction efforts [1]. - The operating rate of PTA production facilities decreased by 4 percentage points from November 10 to November 20, while downstream polyester operating rates only fell by about 1 percentage point, indicating ongoing inventory reduction [1][3]. - Concerns over reduced PX imports due to increased Korean exports to the U.S. have led to a temporary strengthening of the PX market, with a reported decrease of approximately 20,000 tons in PX exports from Korea to China from November 1 to 20 compared to October [3]. Group 2: Supply and Demand Factors - Despite four months of continuous inventory reduction, the spot market for PTA remains under pressure, with significant backwardation against futures prices due to weak demand and high inventory expectations for early 2024 [4]. - The traditional demand slump in January-February is expected to lead to an accumulation of 830,000 to 900,000 tons of PTA inventory, further impacting market dynamics [4]. - The average PTA processing fee from July to November was reported at 198 yuan per ton, indicating a production loss situation, which may lead to unplanned production cuts or maintenance of PTA facilities in the future [3]. Group 3: External Influences - The crude oil market is expected to face oversupply as OPEC+ plans to implement a joint production cut of 1.65 million barrels per day starting in October 2025, with a gradual increase in production in the last quarter of 2024 [6]. - Geopolitical tensions, particularly between the U.S. and Venezuela, could impact crude oil supply, as Venezuela holds the largest oil reserves globally, which may influence oil prices positively if conflicts arise [6]. - Overall, the upward trend driven by cost factors in the PTA market is likely to conclude, with demand weakening and inventory levels rising becoming the dominant factors moving forward [6].