In early July, upstream polyester feedstock prices including PX, PTA, and MEG rose simultaneously, outperforming downstream finished products. PTA closed up 1.26% and PX up 1.37%, driving market sentiment recovery. However, downstream weaving operating rates fell 8 percentage points year-on-year amid weak seasonal demand, highlighting a clear supply-demand divergence and intensifying chain-wide bargaining.
Supply Contraction: PX Operating Rate May Hit Historic Low
PX is the core driver of this price surge. At end-June, Shenghong's 4 million ton/year PX plant fully shut down for about 45 days; Hainan Refinery's 660,000 ton/year PX line reduced load for up to three months. Industry institutions predict domestic PX operating rate will drop below 60% in early July, a historic low. Tight supply directly supports PX strength, a logic unlikely to reverse short-term.
PX supply tightening resonates with crude oil rebound. Iran strengthened key waterway control, international crude stopped falling and rebounded, boosting commodity risk appetite. Domestic traders raised spot quotes after weekend consolidation, further pushing futures and spot prices upward.
PTA Maintenance Wave Continues, Low Capacity Utilization
PTA industry has seen large-scale centralized maintenance since April, with peak capacity involved exceeding 22 million tons, over 20% of national total. Daily operating rate bottomed near 60%, a low since October 2021. Dense maintenance plans persist in June-July, making short-term capacity recovery unlikely.
Two key variables warrant tracking: First, rising processing fees may weaken plant maintenance willingness, requiring observation of actual plan implementation. Second, restart progress of idled units will directly affect short-term supply increments, influencing price volatility. Currently, PTA's strong trend remains unchanged short-term.
MEG: July Domestic Contraction, August Import Surge
MEG shows phased divergence in July. Domestic coal-chemical and refining units entered concentrated maintenance and load reduction cycles, with monthly output expected to decline significantly, supporting prices. Import side shows low-then-high trend as shipping channel conditions improve and arrivals gradually rise. Data shows May MEG imports at 200,000 tons, with June-July maintaining similar levels; institutions estimate August port imports will double to 400,000 tons. H2 import increases will ease domestic supply tightness, but MEG prices remain weakly volatile, requiring downstream demand recovery for reversal.
Terminal Off-Season Suppresses Demand, Weaving Recovery Limited
Weak demand is the core constraint on chain-wide upward space. July is traditional off-season for polyester downstream, lacking explosive positives. June Jiangzhe weaving enterprises averaged 52.4% operating rate, up only 1 percentage point month-on-month but down 8 percentage points year-on-year. Autumn-winter fleece fabrics saw minor local order recovery, but lacking bulk order support, weaving enterprises show weak willingness to boost operating rates and stock up, with cautious sentiment.
H2 inflection point awaits new order release signals. Current supply-demand divergence continues pulling prices: short-term PX and PTA remain strong, MEG capped by forward import increases; medium-term sustainable uptrend depends on terminal weaving order recovery. Crude oil macro volatility, maintenance fulfillment and restart progress are key variables influencing chain prices, requiring multi-dimensional supply-demand tracking.