MOSCOW (MRC) -- The demand outlook for China’s purified terephthalic acid (PTA) in the second quarter could be bullish amid expectation that polyethylene terephthalate (PET) seasonal operating rates will rise and boost demand for the feedstock, according to a source at a Chinese commodity hedge fund, reported TPS.
According to the source, several Chinese fund managers believe that PET and polyester operating rates are set to rise ahead of a traditional peak season in summer, where consumption of clothing and beverages drive PET production.
Another bullish factor in consideration is the continued closure of China's Xianglu Petrochemicals, which is unlikely to restart in the next three-to-six months, according to this source who was formerly an employee of the company.
"Personally, this could also be bullish news for paraxylene (PX)," the source said.
TPS operation data shows that Chinese PTA plants are likely to rev up production in anticipation of a PET demand revival.
China's biggest PTA maker Yisheng Petrochemical restarted its 2.2 million mt/year No. 4 PTA line February 22, and expects to restart its 2 million mt/year No. 3 unit H1 Mar. Both plants are located at Ningbo.
Meanwhile, Chinese PTA major Hengli Petrochemical had its 2.2 million mt/year No. 3 unit at Dalian unexpectedly shut on February 19 due to a technical issue, but is also gunning to restart before the end of February.
MRC