Geopolitical risks elevate crude oil premiums, driving PTA to continue rising in line with costs.

Preface: This cycle witnessed fluctuating price movements across the industrial chain. Regional tensions and Strait risks, after a brief de-escalation, intensified once more. The US and Iran ceased mutual attacks, with expectations of a new ceasefire agreement. Declining crude oil prices negatively impacted commodities. Various parties are negotiating the management plan for the Strait of Hormuz. Iran's attack on a US military base in Jordan broke the informal ceasefire, leading to a continuous escalation of US-Iran confrontations. Navigation through the Strait of Hormuz and the Bab el-Mandeb Strait has been restricted, with supply-side concerns triggering risks in shipping and energy. The industry's underlying supply-demand fundamentals remain healthy, with expectations of improvement in August. Market prices rebounded after an initial decline.

Key Points:

1. Domestic PTA weekly production this cycle: 1.1606 million tons, up 49,400 tons from last week.
2. Domestic PTA weekly capacity utilization rate this cycle: 60.47%, up 2.50% from last week.
3. Weekly average operating rate of the polyester industry this cycle: 79.72%, down 0.32% from last week.
4. PTA social inventory this week: approximately 2.0616 million tons, a decrease of 213,000 tons from the previous week.
5. Average PTA processing fee this week: 363.68 yuan/ton, down 102.39 yuan/ton from last week.

Contents:

1. Geopolitical Risks Fluctuate; Market Initially Falls Then Rises
2. Geopolitics Boost Costs; PTA Processing Fees Compress
3. Supply Increases While Demand Decreases; Balance Sheet Destocking Narrows
4. Geopolitical and Strait Risks Continue to Simmer; Market Follows Cost Adjustments