Overview
Military clashes between the US and Iran resurfaced this week, which lifted crude oil prices. Mixed xylene (MX) supply was tight, PX operating rates were generally low both domestically and overseas, and some producers had expectations of extended maintenance or load reductions. As a result, PX processing margins rose and absolute prices increased over the week.
Key observations:
I. Weak Demand, Lower PX Prices
During this period (August 27–September 2, 2026; hereinafter the same), the US and Iran again clashed militarily, and crude oil prices rose. MX supply was tight, PX operating rates were generally low both at home and abroad, and some producers were expected to extend turnarounds or cut operating loads. PX processing margins rose during the week, and absolute prices moved higher. On Wednesday, September 2, the average Asian PX market price was $1,118.6/mt CFR China and $1,096.6/mt FOB Korea, up $24.97/mt from the previous week, or +2.28% and +2.33%, respectively. Sinopec's August PX settlement price was 8,640 yuan/mt (10 yuan/mt less for cash payment).
At the beginning of the week, several domestic units were restarted in succession, clearly increasing supply. Combined with strong expectations of load cuts at downstream polyester plants, market concerns about a weaker supply-demand balance intensified, and spot prices initially pulled lower. From midweek onward, however, Middle East tensions escalated and international crude oil prices kept strengthening, providing firm cost support; meanwhile, spot liquidity tightened, and spot prices kept rising. East China spot prices thus showed a pattern of volatile strengthening over the week.
At the close, the weekly average spot price for PTA in East China was 6,307 yuan/mt, up 71 yuan/mt from the previous week's average.
II. Shenghong Restarts; Output Increases
This week, Shenghong's 2-million-mt/yr PX unit started production. Hainan Refining & Chemical's 1.6-million-mt/yr unit, Fuhai Chuang's 1.6-million-mt/yr PX unit, and Yangzi Petrochemical's 890,000-mt/yr unit remained under maintenance. Operating loads at other units were unchanged. PX output this week was 657,800 mt, up 3.2% week-on-week. Domestic PX average weekly capacity utilization was 79.34%, up 2.46 percentage points week-on-week.
During this period, domestic PTA output was 1,248,100 mt, up 84,000 mt from last week and down 62,200 mt from the same period last year. Weilian Chemical and Shenghong Petrochemical restarted and began producing within the period, keeping domestic output on an upward trend.
III. Low Supply, Destocking
PX output forecast for next week:
Next week, Hainan Refining & Chemical's 1.6-million-mt/yr unit and Yangzi Petrochemical's 890,000-mt/yr unit will remain under maintenance. Fuhai Chuang's 1.6-million-mt/yr PX unit is expected to start production. PX weekly output is forecast at 690,600 mt, with average weekly capacity utilization at 83.3%.
Table 1 China PX Supply-Demand Balance
Unit: 10,000 mt
| Data type | Item | Current period | Previous period | Change | Next period |
|---|---|---|---|---|---|
| Supply | Domestic PX output | 65.78 | 63.74 | 2.04 | 69.06 |
| PX imports | 14.00 | 14.00 | 0.00 | 14.00 | |
| Total supply | 79.78 | 77.74 | 2.04 | 83.06 | |
| Demand | Domestic consumption | 82.58 | 77.02 | 5.56 | 89.98 |
| Exports | 0 | 0 | 0.00 | 0 | |
| Total demand | 82.58 | 77.02 | 5.56 | 89.98 | |
| Supply-demand balance | Weekly theoretical balance | -2.80 | 0.72 | -3.52 | -6.92 |
Data source: Chempricehub Information.
PTA output forecast for next week:
Although Hengli's No. 2 line will be shut down next week, Fuhai Chuang and Jiaxing Petrochemical are about to start production. Combined with load increases at units restarted this week, domestic supply is expected to keep increasing. Weekly output next week is estimated at around 1.36 million mt.
IV. Tight Spot Supply, Prices to Remain Strong
This week, a total of 20 sample companies were surveyed, including 15 PX producers, 3 downstream companies, and 2 traders.
Bullish expectations accounted for about 60%, citing tight spot supply and cost support. Neutral expectations accounted for 25%, mainly on the view that the market lacked clear directional guidance. Bearish expectations accounted for 10%, citing a number of restarts further out as a supply-side negative.
The PX market is expected to remain strong next week, with firm cost support, tight PX spot supply, and tight upstream feedstock supply. PX prices are expected to move higher with fluctuations, trading around $1,150/mt CFR China next week.
Cost side: International crude oil prices are expected to have room to rise next week, with WTI possibly trading at $84–93/bbl and Brent at $89–98/bbl.
Supply side: Hainan Refining & Chemical's 1.6-million-mt/yr unit and Yangzi Petrochemical's 890,000-mt/yr unit will remain under maintenance next week. Fuhai Chuang's 1.6-million-mt/yr PX unit is expected to start production. PX weekly output is estimated at 690,600 mt, with average weekly capacity utilization at 83.3%.
Demand side: Although Hengli's No. 2 line will be shut down during the period, Fuhai Chuang and Jiaxing Petrochemical are about to start production. Coupled with higher loads at units restarted this week, domestic supply is expected to keep increasing, with weekly output estimated at around 1.36 million mt.
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