Introduction: The near-term geopolitical premium and supply risks are gradually weakening, with industry drivers shifting towards supply and demand fundamentals. The marathon negotiations between the US and Iran in Islamabad failed to reach an agreement, prompting the US President to subsequently decide to block Iranian maritime traffic, driving a 10% surge in WTI crude oil prices. The geopolitical premium pushed up costs and commodity prices, but the slower-than-expected improvement in industrial supply and demand constrained the market's price recovery. News on April 13 indicated that a second round of US-Iran talks may be held soon, leading to some release of geopolitical risk. The crude oil premium faces a pullback, limiting further upward valuation adjustments. Cost-side and demand-side drivers are opposing. Considering increased unplanned losses upstream, reduced overseas PX imports, and a partial shift to the US leading to further supply tightening, the market remains concerned about supply risks. Supported by costs, coupled with increased maintenance and an optimized supply-demand structure, the spot price of PTA has moved higher.

Core Logic:

• Cost: Low PXN spreads, increased economic-based and advanced maintenance plans for PX, supplier contract reductions, and geopolitical impacts reducing Asian refinery operating rates are expected to cut April imports by 200,000-300,000 tons.
• Supply & Demand: Increased PX maintenance in Q2 tightens supply. PTA unit maintenance plans for May exceed expectations, shifting the industry supply-demand balance towards destocking. Terminal weaving still lacks orders, negative feedback intensifies with operating rates below the same period last year. Polyester faces low sales and difficulties in realizing profits from inventory, with plans to further deepen production cuts.

I. Industry Profit Distribution: Concentrating in Naphtha, Polyester Industry Profits Diverge

As of this week (2026.04.10-04.16), prices across the chain fell, with naphtha, PX, and PTA down -7.10%, -1.63%, and -4.30% week-on-week (WoW) respectively. Polyester products followed suit, with polyester filament, staple fiber, bottle chip, and chip down -1.59%, -2.53%, -1.01%, and -2.92% WoW respectively. In terms of profits, the low PXN spread recovered, with the weekly average up +43.72% WoW to $190.10/ton. PTA processing fees declined, down -56.26% WoW to 161.06 RMB/ton. High melt costs combined with overall sluggish sales at polyester plants led to insufficient profit realization in the polyester sector.

II. Supply Environment: Industry Structure Optimizing, Expect Shift to Destocking

Currently regarding PTA units: Dushan Energy's 3 MTA unit is under planned maintenance; INEOS's 1.1 MTA maintenance is slightly delayed; Sichuan Energy Investment's unit was shut down ahead of schedule due to issues; previously shut units continue maintenance. Based on increased maintenance upstream, from mid-April, units at Jinling, Fuhaichuang, Yangzi, Zhongjin, Hailian, and Shenghong have maintenance plans or expectations of advanced maintenance. For PTA, units at FCFC, INEOS, Formosa Chemicals & Fibre (FCFC/Ta Hwa), Tongkun, Sanfangxiang, Hengli Petrochemical, and Weilian Chemical plan maintenance. Over 13 MTA of capacity is expected to undergo maintenance in May, leading to a destocking of over 300,000 tons. Regarding basis: Warehouse receipts remain substantial, with social inventory suppressing the spot basis. April main port deliveries traded at a discount of 15-28 points to the May contract. Based on increased maintenance expectations, the spot basis has firmed slightly. Main suppliers offered bundled sales, with April deliveries trading at par to a premium of 10 points to the May contract, and May deliveries trading at a premium of 130-180 points to the September contract.

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

In polyester, mainstream filament producers will increase production cut ratios to 30%, extending until the end of June. Mainstream staple fiber producers decided to implement a 10% production reduction for price support over two months (until end of May). Chip producers intend to support prices. Although new capacity started within the week, low sales and gradual inventory build-up led the weekly average polyester operating rate to decline -0.39% WoW to 82.23%. In weaving, most participants hold a bearish or wait-and-see view on the outlook, with expectations heating up for production cuts and holidays during the May Day period. The comprehensive operating rate for chemical fiber weaving this week was 52.72%, down -0.42% from the previous period.

Summary: Progress in US-Iran talks will gradually weaken the geopolitical premium. Crude oil and PX costs may fluctuate and retreat from highs. Considering concentrated PX maintenance in Q2, reduced April imports, and continued supply tightening from force majeure by a Korean supplier, coupled with over 13 MTA of PTA maintenance planned for May, the industry supply-demand balance is shifting rapidly towards destocking. However, with industry inventory accumulation exceeding 1 million tons from January to March, social inventory remains substantial, requiring the market to rebalance inventory and maintenance. It is expected that as the positive supply factors are gradually digested, their support for market prices will weaken. Attention should be paid to subsequent support from the materialization of unit maintenance. Furthermore, considering the lack of orders in terminal weaving, low polyester sales, and deepening production cuts will continue to create negative demand feedback, limiting upside price potential. Overall, the price center for PTA spot and futures is expected to first consolidate within a range following cost trends and supply contraction, later shifting to high-level volatility under demand drag. The spot basis is expected to gradually firm as inventory is digested and maintenance is realized.