Introduction: Repeated breakdowns in US-Iran negotiations and recurring blockades of the Strait of Hormuz sustain crude oil supply risks. A continuous tug-of-war persists between upstream supply preferences and weak downstream demand. As PXN recovers to around 300 yuan/ton, some upstream PX units have increased operating rates, marginally easing supply tightness. PTA's own supply-demand dynamics continue to contract, but high plant inventories and warehouse receipts dampen sentiment, with near-term destocking falling short of expectations. Overall, the failure of US-Iran talks and the blocked strait elevate supply risks, while both supply and demand in the chain weaken. Real high inventories and distant loose expectations clash. Meanwhile, terminal polyester capacity cuts continue. Although margin recovery may slightly ease upstream supply pressure, it generally caps price upside.

Core Logic:

• Cost: PXN is recovering from low levels; the PX-MX spread is reasonable. Some units plan to increase operating rates, which is expected to moderately ease local supply, while PX imports are still declining.
• Supply-Demand: In May, units from FCFC, Tongkun, Hengli, and Wilmar have scheduled maintenance, with the scope of maintenance increasing. The industrial chain supply-demand is destocking, but high social inventories need to be absorbed. The terminal sector still lacks orders, with a heavy expectation of production cuts before the holiday. Polyester production and sales are low; filament yarn inventory makes profit realization difficult. Filament yarn and staple fiber continue to cut production. Bottle chip margins are good with tight supply, but a return of supply is expected subsequently.

I. Industry Profit Distribution: Polyester Raw Material Profits Recover, Downstream Polyester Profits Diverge

As of this week (April 17-23, 2026), chain prices showed mixed changes. Naphtha, PX, and PTA changed by -7.39%, +0.93%, and +1.62% WoW, respectively. Polyester products followed the decline, with polyester filament yarn, polyester staple fiber, polyester bottle chip, and polyester chip changing by -2.80%, +0.76%, +2.79%, and +0.79% WoW, respectively. In terms of profit, PXN further recovered, with the weekly average up 45.45% WoW to $276.50/ton. PTA processing spread also recovered, up 27.96% WoW to 206.10 yuan/ton. Melt costs are high, polyester plant production and sales remain sluggish overall, filament yarn profit realization is insufficient, staple fiber output cuts are materializing, and bottle chip supply is tight, maintaining profits.

II. Supply Environment: Industry Structure Optimized, Far-Month Supply-Demand Destocking

This week, PTA supply was compressed. Regarding units, a total of 6.5 million tons of capacity from Ineos, Hengli Petrochemical, and Sanfangxiang underwent maintenance. Some units reduced or increased operating rates, while units already shut down for maintenance continued their shutdowns. Regarding basis, high plant inventories and warehouse receipts dampened sentiment. In April, trades for main port cargo were executed at 05 discount 16-23, while May trades for main port cargo were done at 05 premium 5-8 or 09 premium near 170.

III. Demand Environment: Weak Downstream Support, Demand Concerns Persist

Polyester Supply: During this period, the average production-sales ratio for polyester filament yarn was 43.3%, down 14.8% WoW. POY plant inventory stood at 28.9 days, up 1.4% WoW; FDY plant inventory was 32.5 days, up 1.56% WoW; DTY inventory was 34.2 days, up 5.88% WoW. The average production-sales ratio for polyester staple fiber plants was 55.58%, down 9.64% WoW. Due to low production and sales, inventory is difficult to translate into profit. The weekly capacity utilization rate for the polyester industry was 81.22%, down 1.01 percentage points WoW. In the near term, downstream restocking sentiment is cautious ahead of the holiday. Weaving production suspensions are diluting demand, and leading polyester companies plan to increase the scale of production cuts.

Conclusion: Overall, uncertainties in crude oil supply persist due to US-Iran geopolitical disturbances. Focus on PX margins and the realization of advance maintenance schedules. PTA maintenance drives a contraction on both supply and demand sides, but high social inventories limit the pace of destocking. Combined with low downstream polyester production and sales, high inventories, and the negative feedback from terminal production cuts materializing, the market seeks a breakthrough between strong costs and weak demand in the short term. Medium-to-long-term trends will hinge on tracking the PX-PET supply-demand balance and the pace of recovery in terminal orders.