NOACY Futures: Cost Support Expected to Drive PTA Higher

Overnight, PX prices saw a slight uptick. Currently, the PXN spread is around $205 per ton. In terms of supply, this week's PX output was 75.03 million tons, down 2.13% week-on-week. The domestic PX capacity utilization rate was 89.46%, down 1.95% week-on-week. Jiujiang Petrochemical is undergoing scheduled maintenance. On the demand side, the current PTA operating rate is 77.3%, with this week's PTA output at 133.89 million tons, up 0.25 million tons from last week and down 2.37 million tons year-on-year. The domestic PTA capacity utilization rate is 76.86%, down 0.12% week-on-week and down 4.12% year-on-year. The PX-naphtha price spread is at a low level. With a reduction in PX supply and some PTA units scheduled for maintenance, there is an expectation of a weakening in PX supply and demand. Geopolitical risks are on the rise again, pushing up the oil price center, and it is expected that PX will follow the cost side in its movement.

Overnight, PTA prices were slightly weaker. The current PTA processing margin is around 324 yuan per ton. In terms of supply, the current PTA operating rate is 77.34%, with this week's PTA output at 133.89 million tons, up 0.25 million tons from last week and down 2.37 million tons year-on-year. The domestic PTA capacity utilization rate is 76.86%, down 0.12% week-on-week and down 4.12% year-on-year. On the demand side, the current polyester operating rate is 89.92%. The polyester industry's weekly output is 151.74 million tons, up 3.41 million tons week-on-week, with a 2.3% increase. The average weekly capacity utilization rate of China's polyester industry is 89.82%, up 1.98% week-on-week. In terms of inventory, this week's PTA factory inventory is 4.84 days, down 0.18 days from last week and down 0.53 days year-on-year. The polyester factory's PTA raw material inventory is 9.05 days, down 1.15 days from last week and up 1.78 days year-on-year. Yisheng Daha is undergoing scheduled maintenance, while Hengli Petrochemical and Yizheng Petrochemical are restarting, keeping the PTA operating rate low. Downstream polyester demand has recovered, and inventory has declined. The PTA supply and demand outlook is positive, and with cost-side support, it is expected that PTA prices will trend higher.

Overnight, MEG prices rose. In terms of supply, the weekly output of MEG units is 40.1 million tons, up 0.2% week-on-week. This week's domestic MEG total capacity utilization rate is 66.7%, up 0.14% week-on-week. On the demand side, the current polyester operating rate is 89.92%. The polyester industry's weekly output is 152.48 million tons, up 0.74 million tons week-on-week, with a 0.49% increase. The average weekly capacity utilization rate of China's polyester industry is 90.26%, up 0.44% week-on-week. In terms of inventory, as of March 20, the total port inventory of MEG in the East China main port area is 68.23 million tons, down 2.05 million tons from last Monday. As of March 26, 2025, the estimated domestic MEG East China total arrival volume is 13.11 million tons, down 1.18 million tons from last week's plan. With a decline in East China MEG arrivals, it is expected that port inventory pressure will continue to ease. Gulei is restarting, Hami Guanghui is reducing its load, and Yankuang has a maintenance plan in late March. Downstream demand is continuously recovering, and the domestic MEG supply and demand outlook is positive.

Overnight, short fiber prices were slightly weaker. Currently, the short fiber sales rate is 91.78%, up 15.28% from the previous trading day. In terms of supply, this week's polyester short fiber output is 15.81 million tons, up 0.15 million tons week-on-week, with an increase of 0.96%. The average capacity utilization rate is 82.45%, up 0.96% week-on-week. Recently, Jiangnan High Fiber and Xiamen Xianglu have restarted. On the demand side, this week's average sales rate of polyester short fiber factories is 88.63%, up 1.97% from the previous period. The average operating rate of the pure polyester yarn industry is 82.12%, unchanged week-on-week. In terms of inventory, as of March 20, the rights inventory of polyester short fiber factories in China is 11.01 days, down 0.47 days from the previous period. The average raw material inventory for pure polyester yarn is 10.2 days, up 0.4 days week-on-week. With the restart of previously shut-down units, short fiber supply is rising. Downstream operations are increasing, and there is some restocking under a bottom-fishing mentality. However, short fiber processing fees are being squeezed, and cost-side volatility risks are increasing. It is expected that short fiber prices will continue to trend weakly, with attention on downstream restocking and cost-side developments.

Overnight, bottle chip prices were slightly higher. In terms of supply, this week's domestic polyester bottle chip output is 29.10 million tons, down 0.49 million tons from last week, a decrease of 1.66%. In terms of exports, in February 2025, China's polyester bottle chip exports were 48.76 million tons, up 6.60 million tons from the previous month, or an increase of 15.66%. In late March, Wanka, Yizheng, Tenglong, and Yisheng Hainan's 50 million tons are scheduled to restart, with the release of output expected to be delayed until April. There is an expectation of an increase in bottle chip supply. Terminal processing industries are gradually resuming operations, and the soft drink industry's operations are increasing, with factory inventory pressure being somewhat relieved. In the short term, the supply and demand for bottle chips are strong. The single-sided price of bottle chips is largely influenced by the cost side, with attention on the later new plant commissioning and cost support situations.