Polyester Chain Navigates Uncertain Markets Amid Oil Price Volatility

Crude oil markets have shown tentative recovery following periods of heightened volatility, primarily responding to geopolitical tensions and supply concerns. However, the sustainability of this rebound remains questionable given persistent macroeconomic uncertainties and potential demand headwinds.

The polyester feedstock complex has exhibited mixed performance:

• Paraxylene (PX: Prices found support from tightened supply during the peak maintenance season, with market balances expected to stabilize as Q2 progresses
• Purified Terephthalic Acid (PTA): Margins remain compressed, requiring stronger downstream demand to sustain any price recovery
• Monoethylene Glycol (MEG): Inventory adjustments continue to influence pricing, though fundamental balances suggest gradual destocking

Current polymerization costs for PET production remain below historical averages, though both PX and PTA units continue to face margin pressure. While the PX turnaround season provides temporary market stability, PTA producers are likely to operate with narrow margins in the near term.

Downstream polyester operating rates are showing seasonal improvement, providing baseline demand support. However, market sentiment remains cautious, with buyers awaiting clearer signals from both domestic and international textile markets. Industry observers suggest that while Q2 inventory reductions may establish a floor for prices, meaningful upside potential remains contingent upon broader crude oil trends and tangible demand recovery.

Market analysis based on industry data and CCF Group reporting. Forward-looking statements involve inherent uncertainties and market risks.