At the start of July, the polyester chain witnessed a clear divergence. Upstream PX and PTA prices rose sharply due to concentrated plant maintenance, pushing operating rates to historic lows. However, downstream weaving operating rates fell 8% year-on-year, with weak end-order demand intensifying market uncertainty.
Supply Side: PX and PTA Shutdowns Drive Prices Higher
PX supply contraction is the core driver of this price rally. By late June, multiple domestic PX units entered maintenance or reduced loads. Shenghong's 4-million-ton/year PX plant fully shut down for an expected 45-day turnaround. Hainan Refining & Chemical's 660,000-ton/year line reduced load for up to three months. Industry estimates suggest the overall PX operating rate will fall below 60% in early July, a historic low. This supply crunch directly supported PX prices, which rose 1.37%.
The PTA sector has undergone a massive maintenance wave since April, involving a peak capacity of over 22 million tons—more than 20% of national capacity. Daily operating rates dipped to around 60%, the lowest since October 2021. Dense maintenance schedules in June and July mean capacity utilization is unlikely to recover soon. PTA prices rose 1.26%, tracking PX closely.
Key variables to watch: if processing fees rise, plant operators may reduce maintenance; also, restart schedules will directly affect short-term supply increments.
Ethylene Glycol: Domestic Contraction vs. Import Surge
Ethylene glycol faces a phased divergence in July. Domestic coal-chemical and refining units are under concentrated maintenance, leading to an expected decline in monthly output, which provides some price support. However, imports show a low-first-half, high-second-half pattern. Data shows May imports at 200,000 tons, with June and July similar, but August port arrivals are forecast to double to 400,000 tons. This forward import surge will ease domestic tightness and cap price gains.
Macro-level headwinds persist, keeping ethylene glycol prices in weak oscillation. A reversal awaits downstream demand recovery.
Demand Side: Weaving Off-Season Caps Upside
Weak downstream demand remains the core bottleneck limiting the chain's upside. July is a traditional off-season for polyester downstream, with no explosive demand catalysts. Combined with ongoing PTA maintenance, overall polyester operating rates are likely to remain low.
Weaving data is equally weak. In June, Jiangsu-Zhejiang weaving mills averaged a 52.4% operating rate, up 1 percentage point month-on-month but down 8 points year-on-year. While autumn/winter fleece fabric orders have picked up slightly, a lack of bulk orders means mills are reluctant to raise operating rates or build inventories. Market sentiment remains cautious.
Outlook: Short-Term Firm, Medium-Term Depends on Orders
In summary, upstream polyester raw materials in July benefit from supply contraction logic through concentrated maintenance, providing strong short-term price support. But downstream is in a traditional off-season, with little chance of substantive demand improvement. This supply-demand divergence will continue to pull the market in opposite directions.
Short-term, PX and PTA are likely to remain strong, while ethylene glycol gains are capped by forward import surges. Medium-term, whether a sustained rally can emerge depends crucially on the pace of weaving order recovery. Crude oil macro volatility, plant maintenance execution, and restart schedules are also key variables.