After a deep correction, the polyester chain saw a collective rebound on June 30, with PX closing up 0.87% and PTA up 0.91%. This recovery is not accidental but the result of multiple fundamental factors: tight upstream PX supply, massive PTA turnarounds, and rising replenishment expectations downstream. However, weak end-user demand raises questions about the sustainability of this rebound.
Tight PX Supply: Structural Imbalance After Geopolitical Premium Fades
Transit volume through the Strait of Hormuz has recovered to about 75% of pre-conflict levels, and shipping insurance premiums remain high but are declining. Yet PX prices have not fallen correspondingly, holding above pre-conflict levels. This resilience reflects PX's own tight supply—plants previously shut for maintenance may restart early, but capacity release is limited in the short term. Strategic reserves in various countries are at low levels, creating theoretical replenishment demand that supports PX prices. For the polyester chain, a strong PX means cost floors are relatively clear, providing a base for PTA and downstream products.
Massive PTA Turnarounds: De-stocking Cycle Reshapes Capacity
Since April, the domestic PTA industry has undergone an unprecedented wave of concentrated turnarounds. Industry data shows that over 22 million tons of capacity—more than 20% of total domestic capacity—has been affected by shutdowns or reduced operating rates. The daily capacity utilization rate fell to around 60%, the lowest since October 2021. This wave of maintenance has pushed the industry into a de-stocking phase, with social inventories declining. The concentrated turnarounds are not accidental: rising PX prices squeezed PTA processing margins, prompting voluntary production cuts; meanwhile, declining downstream polyester operating rates reduced PTA demand, forcing supply-side contraction. This state of "tight upstream, compressed midstream, weak downstream recovery" accurately describes the current polyester chain.
Downstream Polyester: Profitable but Demand Transmission Blocked
In the downstream polyester sector, overall industry profits remain manageable. Except for polyester chips and DTY, most products enjoy a profit margin of 200-300 yuan per ton. However, the impact of the off-season for end-user consumption cannot be ignored. As of June 18, the average operating rate of the domestic polyester industry was 80.19%, down 8.44 percentage points year-on-year, corresponding to a weekly PTA demand of about 1.34 million tons. Meanwhile, the weaving industry's operating rate was 57%, down 13 percentage points year-on-year. More concerning, due to weakened purchasing intentions from end users, polyester filament yarn inventories have continued to rise—meaning that despite upstream raw material price rebounds, intermediate inventory pressure has not eased, and price recovery struggles to transmit downstream.
Supply-Demand Mismatch and Price Recovery Logic
The current polyester chain rebound is essentially a result of supply-side contraction and replenishment expectations. Tight PX supply supports costs, while massive PTA turnarounds accelerate de-stocking, together creating short-term upward price momentum. However, weak demand is the biggest uncertainty—weaving operating rates are down 13 percentage points year-on-year, indicating no substantial recovery in end-user orders. Although recent orders have shown signs of improvement, the strength is insufficient to support a full industry recovery. For market participants, this rebound should be viewed as a technical recovery following the release of pessimistic sentiment, rather than a trend reversal.