<article><p class="lead">Purified terephthalic acid (PTA) futures on China's Zhengzhou Commodity Exchange (ZCE) closed at a one-year high today on the back of rising feedstock paraxylene (PX) costs and possible maintenance shutdowns in March.</p><p>The main May-delivery (TA2105) contract has risen for three straight sessions to close at 4,718 yuan/t ($608/t) today, the highest since 21 February 2020. </p><p>Gains in feedstock PX prices are the main factor behind this week's rise in PTA futures. PX prices on a cfr China basis have increased by more than $100/t - from $750/t to $860/t - since trading resumed after the lunar new year holidays on 18 February. This has helped squeeze PTA production margins in the Chinese domestic market to Yn300/t, down from Yn400/t in January to an uncomfortable level for most PTA producers.</p><p>The narrowing production margins have prompted some producers to consider shutting down for maintenance. Hengli Petrochemical and Xinfengming have indicated they may carry out turnarounds at their PTA production lines next month. </p><p>China PTA manufacturers have been struggling with high inventories for more than six months, a factor that capped PTA prices in 2020. But the sudden announcements of the maintenance plans, together with steady downstream demand, may change the supply-demand balance in March.</p></article>
