PTMEG market may be more complex in Jun

Firstly, the chemical products and oil market did not perform well. As a result, sidelined attitude strengthened on downstream and upstream sectors.

Secondly, price of BDO started falling from mid-May. Therefore, PTMEG price lacked solid support from the cost side.

Thirdly, spandex plants faced big pressure from losses. Most factories have suffered losses in May, while enterprises with advantages in scale, technology and energy managed to be near the break-even line.

Fourthly, it is the news of capacity expansion. Huaheng's PTMEG project started construction from 2022 and is scheduled to start operation in Jun-Jul. The new unit in Jun will be hard to impact the actual supply, exerting more effect on the market sentiment. Under current market sentiment, spandex plants are expected to show weaker intention to hoard up goods. Meanwhile, supply of PTMEG is likely to reduce in Jun as CPP Panjin has turnaround. Guotai Xinhua will have maintenance too. That means the actual supply of PTMEG is likely to inch down in Jun.

Fifthly, the mindset of PTMEG plants. Most PTMEG plants face very low inventory now but the inventory may pile up in Jun as spandex plants plan to cut production. However, the overall inventory may sustain low. PTMEG market is expected to enjoy the best supply/demand pattern on the whole value chain.