Polyester Chain Upstream Maintenance Drives Price Surge, Weak Downstream Seasonal Demand Creates Divergence

In July, upstream feedstock prices in the polyester chain surged, with PX, PTA, and MEG leading the gains, while downstream weaving operating rates fell 8 percentage points year-on-year, creating a stark contrast between supply contraction and weak demand. Industry data shows PTA rose 1.26% and PX climbed 1.37%, driving market sentiment recovery in the chemical sector.

Supply Contraction Driven by Plant Maintenance

Supply-side contraction is the core logic behind the PX price rally. Industry data indicates multiple PX plants entered maintenance in late June, including Shenghong's 4 million ton/year unit, which is fully shut for about 45 days, and Hainan Refining's 660,000 ton/year line, which is running at reduced rates for three months. As a result, industry institutions predict domestic PX operating rates will fall below 60% in early July, a historic low, directly supporting PX prices.

PTA has seen a large-scale maintenance cycle since April, with peak capacity involved exceeding 22 million tons, over 20% of national capacity. Daily operating rates hit around 60%, the lowest since October 2021. The maintenance schedule remains dense through June and July, limiting short-term capacity utilization. Key variables include whether rising processing fees reduce maintenance willingness and the restart pace of idled units.

MEG Faces Divergent Supply-Demand Dynamics

MEG supply is contracting in July due to maintenance at coal chemical and refining units, with monthly output expected to decline, supporting prices in the near term. Imports show a low-then-high trend as shipping channel conditions improve. Data shows MEG imports were 200,000 tons in May, with similar levels in June and July, but institutions estimate August imports could double to 400,000 tons. This influx may ease supply tightness in the second half, but macro headwinds persist, keeping MEG prices weak. A reversal requires downstream demand recovery.

Weak Downstream Weaving Caps Upside

Weak demand is the core constraint on the chain's upside. July is a traditional off-season for downstream polyester consumption, lacking explosive demand catalysts. Combined with ongoing PTA maintenance, polyester operating rates are likely to remain low. Weaving data is also weak: Jiangsu and Zhejiang weaving mills ran at an average of 52.4% in June, up slightly from May but down 8 percentage points year-on-year. While autumn/winter fleece fabric orders are slightly improving, large batch orders are absent, limiting mills' willingness to raise operating rates or build inventory. The market inflection point awaits a concentrated release of new orders.

Practical Recommendations

For Buyers - Monitor PX and PTA maintenance and restart schedules to adjust procurement timing flexibly. - Consider phased MEG purchases to mitigate price risk from future import surges. - Reduce high-cost raw material inventory during the off-season to avoid capital tie-up.

For Foreign Trade Companies - Track crude oil volatility and shipping lane controls to assess raw material cost pass-through risks. - Use futures to hedge against feedstock price fluctuations and lock in order costs. - Monitor downstream order signals to prepare autumn/winter fabric capacity in advance.