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Analyst An Guang, Zhuochuang Information 　　[Introduction] During the New Year's Day holiday, the market was closed. An attack on a South American nation provided short-term support for the crude oil market, indirectly benefiting PTA. However, downstream polyester plants have begun maintenance, and the impact of the demand off-season is starting to show. With mixed bullish and bearish news, the PTA market may open high and then move lower. 　　 Sudden Geopolitical Issue Increases Market Uncertainty 　　 Beginning January 3rd, US forces entered the territory of a South American nation, carried out an attack, and apprehended its leader, who was subsequently transported to the United States. Former President Trump declared the operation a success, marking its conclusion. This sudden geopolitical issue has drawn market attention, raising concerns that the nation's oil production and exports could be affected, providing short-term support for crude oil prices and potentially pushing up PTA prices. However, with 550,000 tonnes of downstream polyester capacity beginning maintenance in early January and the arrival of the demand off-season, these factors may partially offset the impact of rising crude oil prices. 　　 Cost Increase Expectations May Support PTA Market 　　 In the short term, the geopolitical issue provides clear support for the oil market, as the South American nation's oil exports and production are affected. Its oil exports have already been paralyzed, and its oil logistics system has been significantly impacted, which is expected to boost the PTA market from the supply side. The feedback from market sentiment remains to be seen. Reviewing the PTA market in 2025, several price fluctuations – driven by reduced supply of low-priced crude oil from a European nation, anti-involution efforts, and gasoline blending logic – were all influenced supply-side factors affecting market sentiment. China imports approximately 7% of its crude oil from this South American nation. If its logistics are hindered, China's crude oil imports are expected to be affected, which would be positive for PTA market sentiment. 　　 However, given that the South American nation's crude oil production is not high and consists mostly of high-sulfur heavy crude, it is estimated that the supportive effect of the geopolitical issue on the PTA market may lack sustainability. The extraction, transportation, and processing costs of high-sulfur heavy crude are significantly higher than those of ordinary light crude. High-sulfur heavy crude has very poor fluidity at room temperature, whereas light crude flows easily. Extracting high-sulfur heavy crude requires methods like hot water, steam, or chemical additives to improve fluidity, and it needs heating during transportation. In the refining stage, high-sulfur heavy crude requires more complex refinery processes, while most refineries can easily process ordinary light crude. Therefore, logistics disruptions for this nation's high-sulfur heavy crude will affect a relatively limited range of buyer refineries.

Arrival of Demand Off-Season, Market Boost May Be Fleeting 　　 With the demand off-season arriving, historical data shows that the operating rates of downstream polyester plants typically decline by 9 percentage points from January to February, which is bearish for the PTA market. Following seasonal patterns, the terminal textile industry enters its demand off-season. As of December 31, 2025, the comprehensive operating rate for weaving in Jiangsu and Zhejiang was 61.82%, with loom operating rates declining. It is estimated that loom operating rates will continue to fall in January and bottom out in mid-February. Polyester operating rates will follow the decline in loom rates. In early January, 750,000 tonnes of polyester filament capacity and 500,000 tonnes of PET bottle chip capacity are scheduled for maintenance, with additional polyester units potentially undergoing maintenance on undetermined dates. A decline in polyester operating rates in January is certain, and approximately 9 million tonnes of polyester capacity is planned for maintenance from January to February. Polyester production in January is estimated to fall to around 6.5 million tonnes, a decrease of 490,000 tonnes compared to December 2025. Based purely on existing PTA unit maintenance schedules, estimated monthly PTA production for January is 6.59 million tonnes, implying an inventory build of 490,000 tonnes. Factoring in PTA monthly processing margins and expectations for unplanned unit output reductions and maintenance, the more likely estimated PTA production range for January is 6.40-6.45 million tonnes, implying an inventory build of 210,000-260,000 tonnes, which is bearish for the PTA market.

If the PTA market opens higher, it would benefit PTA producers by allowing them to lock in processing margins but would be negative for downstream companies engaging in price-point purchasing. Furthermore, with terminal demand declining, it would be difficult for polyester plants to pass on the cost pressure from rising PTA prices. 　　 In summary, the PTA market is expected to be in a state of tug-of-war between cost support and declining demand in the short term. Next week, the PTA market may open high and then retreat, with the spot price fluctuating in the range of 5,100-5,250 yuan/ton. The crude oil supply issue from the South American nation will provide a temporary boost to the market. However, considering the high extraction and usage costs of its high-sulfur heavy crude and the bearish impact of declining PTA demand, these factors will partially offset the impact of rising crude oil prices early in the week.

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