The polyester chain is caught in a rare squeeze between record-high plant maintenance and tepid downstream demand. From upstream PX to midstream PTA, capacity utilization across the industry is at multi-year lows, yet end-user weaving mills are not providing any positive feedback. This simultaneous contraction on both supply and demand sides means the momentum for price recovery remains insufficient.
Supply Side: Unprecedented Maintenance Wave
In late June and early July, the PX sector entered a dense maintenance period. Shenghong Petrochemical has shut down its 4 million-ton-per-year PX plant for approximately 45 days. Hainan Refining & Chemical has reduced output on one of its 660,000-ton-per-year PX lines, with the curtailment expected to last three months. Industry data shows that domestic PX operating rates will likely fall below 60% in early July, a historic low.
The scale of maintenance in the PTA segment is even more striking. Since April, the industry has seen a wave of concentrated turnarounds, with total capacity affected exceeding 22 million tons—over 20% of domestic capacity. PTA daily capacity utilization once dropped to around 60%, the lowest since October 2021. With more planned maintenance in June and July, utilization will remain depressed in the near term.
Two key variables will determine whether these maintenance plans are fully executed: first, whether high PTA processing margins prompt some plants to defer shutdowns; second, the restart schedule of idled units. These factors will directly affect the pace and magnitude of inventory destocking.
Demand Side: Off-Season and Cautious Sentiment
Unlike the proactive supply cuts, downstream demand exhibits passive weakness. July is the traditional off-season for polyester end-users. Weaving mill operating rates in Jiangsu and Zhejiang averaged 52.4% in June, up 1 percentage point month-on-month but down 8 percentage points year-on-year. This suggests that even as production shrinks, the contraction in end-order volumes is even more severe.
In terms of product mix, demand for autumn/winter fleece fabrics has seen a localized pickup, but the market lacks large orders, and mills show little willingness to raise operating rates. The market remains in a wait-and-see mode, with buyers mainly replenishing on a just-in-time basis and speculative stockpiling minimal. Industry insiders believe short-term upward momentum is insufficient, and prices will continue to track crude oil fluctuations.
Price Outlook: Waiting for Demand Catalyst
With the gradual resumption of navigation in the Strait of Hormuz and a strong US dollar, crude oil prices have already erased all geopolitical risk premiums, and downside pressure has eased. For PTA, the destocking expectations for PX and PTA itself provide some floor support, but the upside space depends entirely on when end-user demand recovers.
Overall, the core contradiction in the polyester chain in July lies not on the supply side but on whether demand can show marginal improvement during the off-season. If new orders for the second half start to pick up around August, PTA prices could see a phased rally; otherwise, the current low-operating, low-demand pattern may persist until the end of Q3.