July presents a clear supply-demand divergence in the polyester chain: upstream PX, PTA, and MEG prices surge due to concentrated plant maintenance, while downstream weaving enters a traditional off-season, with operating rates dropping sharply year-on-year, intensifying market long-short standoffs.
Plant Maintenance Drives Upstream Strength
The upstream rally is fundamentally supply-driven. For PX, a 4-million-ton/year unit at Shenghong has fully shut down for an estimated 45-day maintenance cycle, while a 660,000-ton/year line at Hainan Refinery has entered a three-month reduced-load phase. Industry forecasts suggest domestic PX operating rates will fall below 60% in early July, a historic low, directly supporting PX prices.
PTA has seen a massive maintenance wave since April, with total capacity involved in shutdowns or reduced loads exceeding 22 million tons—over 20% of national capacity. Daily operating rates dipped to around 60%, the lowest since October 2021. Dense maintenance schedules continue through June and July, with no significant near-term recovery in capacity utilization.
MEG shows a phased divergence: domestic coal-chemical and refining units enter concentrated maintenance cycles, tightening July supply and providing price support. However, imports show a front-low-back-high pattern. May imports totaled 200,000 tons, with similar levels in June and July. Institutions estimate August imports will double to 400,000 tons, capping future price gains.
Weak Off-Season Demand Drags Downstream
Contrasting upstream strength, weak downstream demand remains the core constraint on chain-wide price upside. July is a traditional off-season for downstream polyester consumption, with no explosive positive catalysts, keeping polyester operating rates likely low.
Weaving data is similarly weak: June average operating rates for Jiangsu-Zhejiang weaving mills stood at 52.4%, up only 1 percentage point month-on-month but down 8 percentage points year-on-year. While autumn/winter fleece fabrics see modest local order improvements, a lack of bulk orders keeps mills cautious about raising operating rates or building inventory. Market participants maintain a conservative stance.
Market Outlook Amid Upstream-Downstream Tug-of-War
In the short term, PX and PTA maintain a strong bias, supported by the supply contraction logic from concentrated maintenance. MEG faces cap on gains due to looming import surges.
For medium-to-long-term sustainability, the core variable remains the pace of weaving order recovery. Key factors include crude oil macro volatility, maintenance plan execution, and restart progress. If processing fees rise significantly, plant maintenance willingness may decrease, requiring close monitoring of actual maintenance implementation. Restart progress of current shutdown units will directly affect near-term supply increments.