In 2025, the PTA spot basis experienced a rally followed by a retreat, with gains in the first half and declines in the second half. As of early December, the annual average PTA spot basis stood at CNY 8/ton, up CNY 35/ton (130%) from 2024, marking a shift from negative to positive territory. The primary driver was inventory drawdowns throughout the year, despite new PTA capacity additions. Frequent plant maintenance, particularly concentrated among major producers from February to June, supported the basis rally, peaking in May-June and lifting the annual average.

**First Half: Concentrated Maintenance and Seller’s Market Dynamics** The PTA spot basis surged in the first half of 2025, recording its strongest uptrend since July 2023. The basis peaked in June, reaching a premium of CNY 295/ton over the futures reference contract (2509) on June 18, with the monthly average at CNY 237/ton—up 40.24% month-on-month and 717.24% year-on-year. This rally was fueled by multiple factors: - Concentrated plant maintenance from February to June, reducing inventories. - Tightened spot supply as a major supplier slowed deliveries while another ramped up purchases. - Robust downstream polyester operating rates (~90%) amid export demand, sustaining PTA consumption. A seller’s market emerged in May-June, forcing buyers to chase prices higher.

**Second Half: Ample Supply and Basis Retreat** The basis declined in the second half due to shifting supply-demand expectations. New PTA capacities came online, including trial runs of 2.5 million tons in East China (June 7) and additional 1.6 million tons in July and August. Spot supply expanded, pressuring the basis. July saw a cliff-like drop (monthly average down 84.39%), with output hitting a record high (+280,000 tons from June), ending four consecutive months of inventory drawdowns.

**Short-Term Outlook (2026 Q1): Seasonal Weakness** The basis is expected to weaken in January-February 2026 due to seasonal demand lulls. Historical data (2013–2025) shows average loom operating rates drop 29 percentage points in Q1 (to ~42%) versus Q4, driven by Lunar New Year shutdowns. Polyester plants will cut output, reducing PTA consumption and accelerating inventory builds (~500,000 tons). Weak processing margins and prolonged plant operations further weigh on the basis.

**Mid-Term Outlook (2026 Q2): Demand Recovery** A rebound is anticipated from March, supported by the "Golden March-Silver April" demand recovery. Loom operating rates typically rebound 32 percentage points in March-April (to ~74%), boosting PTA consumption. With the 2026 Lunar New Year falling later (February 17), the post-holiday recovery could exceed historical averages. Additionally, 1.55 million tons of new polyester capacity (adding ~120,000 tons/month PTA demand) will come online in Q1 2026.

**Wildcard: Unplanned Plant Shutdowns Amid Low Margins** Persistently low processing margins (~CNY 200/ton in 2025 H2) may trigger unplanned PTA plant maintenance, tightening supply. With no new PX or PTA capacity in 2026 H1, PX supply gaps could further squeeze PTA margins, potentially supporting the basis.

**Market Sentiment** Traders remain cautious on Q1 2026, with December 2025 basis still negative despite expected inventory draws. However, optimism prevails for March-May 2026, with a "weak near, strong far" market structure. Some participants are bearish on January but bullish on May contracts.

**Conclusion** The PTA spot basis is projected to weaken in early 2026 before strengthening from March, potentially surpassing 2025 highs amid demand recovery and supply constraints.