The polyester chain has recently experienced a rare upstream price surge while downstream demand enters seasonal weakness, creating a clear divergence in supply-demand dynamics. PX, PTA, and MEG prices have risen in tandem, significantly outperforming polyester finished products, with market sentiment marked by intense bargaining.
Upstream Supply Contraction Drives Prices
Supply-side contraction in PX is the core logic behind this price rally. At the end of June, multiple domestic PX units implemented maintenance plans. Shenghong's 4-million-ton-per-year PX plant has fully shut down for about 45 days, while Hainan Refinery's 660,000-ton-per-year PX line has entered a reduced-load phase lasting up to three months. Industry institutions predict that domestic PX operating rates will fall below 60% in early July, hitting an all-time low, with the sharp supply contraction directly supporting the PX market's continued strength.
PTA industry has launched a large-scale concentrated maintenance cycle since April, involving peak capacity exceeding 22 million tons, accounting for over 20% of national capacity. Daily operating rates have bottomed out near 60%, the lowest since October 2021. Entering June and July, maintenance plans remain dense, with short-term capacity utilization unlikely to recover significantly. Two key variables are under watch: whether rising processing fees will weaken companies' maintenance willingness, and the restart progress of idled units affecting short-term supply increments.
MEG in July shows a phased supply-demand divergence. Domestic coal chemical and refining units have entered a concentrated maintenance and load-reduction cycle, with monthly output expected to decline significantly. Short-term local supply tightening provides some price support. On the import side, a low-to-high trend emerges as maritime channel conditions improve, with port arrivals gradually recovering. Data shows May MEG imports at 200,000 tons, with June and July maintaining similar levels. Institutions estimate August port imports will double to 400,000 tons, potentially easing domestic supply tightness in the second half.
Weak Downstream Demand Hampers Market
Weak demand remains the core constraint on the chain's upward potential. July is the traditional off-season for downstream polyester consumption, with no explosive demand catalysts. Combined with ongoing PTA unit maintenance, overall polyester operating loads are likely to stay low, with market focus still on upstream unit maintenance and restarts.
Weaving data is also weak. June saw Jiangsu-Zhejiang weaving enterprises' average operating load at 52.4%, up 1 percentage point month-on-month but down 8 percentage points year-on-year. Current partial order recovery for autumn/winter fleece fabrics lacks large-volume order support, with weaving enterprises hesitant to actively raise operating rates or stock up. Market sentiment remains cautious, and the turning point for the second half still depends on new order release signals.
For buyers, this means raw material prices are likely to stay firm in the short term, but weak downstream demand limits room for end-product price increases, potentially further squeezing profit margins. Foreign trade enterprises need to watch the price-dampening effect of increased MEG imports on domestic prices, as well as the impact of crude oil macro fluctuations on overall costs.
Medium-to-Long Term Key Variables
In the short term, PX and PTA are expected to maintain their strong run, while MEG gains are capped by forward import increments. For the medium to long term, the key to a sustained rally lies in the recovery pace of terminal weaving orders. Additionally, crude oil macro volatility, maintenance plan execution, and restart progress are all critical variables influencing chain prices. Industry participants must continuously track multi-dimensional supply-demand changes to flexibly adjust procurement and inventory strategies.