After a sharp correction, the polyester chain saw PX and PTA prices rebound nearly 1%, driven by the largest-ever PTA maintenance wave and easing geopolitical risks. The question remains whether this marks a true bottom or just a temporary bounce.
Supply Side: Record Maintenance and Tight PX
Since April, the PTA industry has initiated a massive maintenance campaign affecting over 22 million tons of capacity—more than 20% of the national total. Capacity utilization briefly dropped to 60%, the lowest since October 2021. This destocking has steadily reduced social inventories, providing a floor for prices. PX, meanwhile, did not break below pre-conflict levels, reflecting its own supply tightness. The potential restart of PX units as Strait of Hormuz navigation improves has already been priced in to some extent.
Demand Side: Weak End-Use and High Inventories
Although polyester margins remain decent, with most products earning 200-300 yuan per ton, the downstream weaving sector is languishing. By June 18, polyester operating rates were 80.19%, down 8.44 percentage points year-on-year; weaving rates were only 57%, down 13 percentage points. Polyester filament yarn inventories have climbed as buyers hold back. This means upstream price increases are not being passed through, and the supply-demand transmission chain is broken.
Geopolitical Variable: Navigation Recovers, But Insurance Stays High
Strait of Hormuz navigation has recovered to about 75% of pre-conflict levels, but shipping insurance rates remain elevated. Strategic reserves globally are low, theoretically supporting restocking demand. However, actual restocking depends on further geopolitical clarity and end-user demand. If PX units restart early, it could offset some of the gains from PTA maintenance.
Outlook: Bottom May Be In, But Recovery Takes Time
The polyester chain is in a state of "tight upstream, compressed midstream, weak downstream." PTA maintenance and tight PX provide short-term support, but low weaving rates and high inventories cap upside. For buyers, current prices offer some safety margin, but chasing rallies is not recommended. Wait for downstream orders to confirm before scaling up purchases.