In early July, upstream polyester chain raw materials PX and PTA saw strong price hikes of 1.37% and 1.26% respectively, leading the entire chain. However, downstream weaving operating rates fell 8 percentage points year-on-year, with weak end-user demand creating a significant drag. The divergent supply-demand landscape intensifies short-term market tug-of-war.
Supply Contraction: PX and PTA Turnarounds Boost Prices
Supply-side contraction is the core logic behind this price rally. By end-June, multiple domestic PX units entered planned turnarounds. Shenghong's 4-million-ton/year PX plant fully shut down for about 45 days, while Hainan Refining's 660,000-ton/year PX line reduced loads for up to three months. Industry institutions predict domestic PX operating rates will fall below 60% in early July, a historic low. The sharp supply contraction directly supports PX's strong performance.
For PTA, a large-scale concentrated turnaround cycle started in April, involving total capacity exceeding 22 million tons, over 20% of national capacity. Daily operating rates bottomed near 60%, the lowest since October 2021. Dense turnaround schedules in June and July mean capacity utilization is unlikely to recover soon. For buyers, this implies persistently tight PTA spot supply, making prices prone to rises and resistant to falls.
Weak Demand: Weaving Off-Season Caps Upward Potential
Weak demand remains the core bottleneck limiting the chain's upward space. July is the traditional off-season for downstream polyester consumption, lacking explosive positive catalysts. Weaving data is also weak: Jiangsu-Zhejiang weaving mills averaged 52.4% operating load in June, up only 1 percentage point month-on-month but down 8 points year-on-year. While autumn/winter fleece fabrics see some localized order improvement, large batch orders are absent, and mills show low willingness to actively raise operating rates or restock.
Industry sentiment remains cautious. Downstream polyester factories face dual pressure from rising raw material costs and insufficient end-user orders, likely keeping their operating loads low. This means upstream price increases cannot effectively pass through, with chain profits still concentrated in mid-to-upstream segments.
Ethylene Glycol: Domestic Shrinkage vs. Import Surge
Ethylene glycol (EG) shows a phased divergence in July. Domestic coal-chemical and refining units enter concentrated turnaround or load-reduction cycles, leading to an expected decline in domestic monthly output, providing some price support from tight local supply. However, imports show a low-then-high pattern: May imports were 200,000 tons, similar in June and July, but institutions estimate August port imports will double to 400,000 tons. Second-half import increases may ease domestic tightness.
Macro headwinds persist, keeping EG prices in weak volatility. A reversal still requires downstream demand recovery, limiting short-term gains due to forward import pressure.
Outlook: Short-Term Strength, Medium-Term Depends on Orders
In the short term, PX and PTA have strong support from supply contraction logic, maintaining a firm tone. EG gains are limited by forward import increases. Medium-term sustainability of any uptrend hinges on the pace of weaving order recovery. Key variables also include crude oil macro volatility, turnaround execution, and restart schedules.
Industry participants must track multi-dimensional supply-demand changes. For upstream suppliers, turnaround execution directly determines short-term margins. For downstream buyers, with raw materials high, controlling inventory risk and flexibly adjusting procurement pace are urgent.