July 11 news
In June, PTA experienced a deep decline, and in July, it began a recovery trend due to concentrated maintenance, showing a generally strong fluctuation within a range. According to the commodity market analysis system, as of July 11, the average spot price of PTA in the East China region was 5910 CNY/ton, an increase of 2.30% from the beginning of the month.
Cost Side: PX Maintenance Provides Cost Floor
July is the peak period for annual PX maintenance, with multiple large PX units at Shenghong, Zhejiang Petrochemical, and Hainan Refining & Chemical shutting down simultaneously. The Asian PX operating rate has fallen to its lowest level of the year, and the price difference between PX and naphtha remains high, firmly supporting the cost bottom line of PTA. Brent crude oil is fluctuating narrowly in the range of $70-73, with limited geopolitical disruptions and no risk of a collapse in the cost side.
Supply Side: Maintenance Cuts, Continuous Inventory Reduction
Weilian Chemical, Honggang Petrochemical, Zhongtai, and other major PTA units in China underwent concentrated maintenance, causing the industry's operating rate to fall to a low of around 57% in July, which is at a relatively low level for the same period in recent years. The market supply tightened, and port and factory inventories steadily decreased. The spot processing fee remained high at 600-700 CNY/ton, supporting the resilience of the spot price.
Demand Side: The textile off-season is suppressing upward price momentum.
In July, which is still part of the traditional low season for the textile industry, the overall operating rate of polyester is about 80%. The inventory of polyester filament products is relatively high. The weaving terminals have not yet seen a concentrated release of autumn and winter orders. Factories are mainly purchasing based on their immediate needs in small quantities and are unwilling to actively stockpile, limiting the upward potential of PTA; the market is mainly waiting for the signal of restocking during the peak season in August.
Analysts believe that the current maintenance cycle for PX and PTA has not yet ended, and the tight supply-demand balance will continue. PTA will maintain a high-level range-bound fluctuation, with solid bottom support, making it difficult to see a deep correction. By the end of July to early August, a large number of maintenance facilities will gradually restart, releasing additional supply. The focus of the market will shift to the fulfillment of downstream peak season orders.
