Lead: Near-term US-Iran tensions have continued to seesaw. On August 25, reports emerged of a ceasefire and temporary navigation through the Strait, and the market traded on expectations of geopolitical de-escalation and Strait passage, weighing on crude costs. On August 27, the US side rejected the previous memorandum of understanding, closing the negotiation channel and eliminating de-escalation expectations. However, recovering Gulf crude exports capped the upside for oil prices, leaving the cost side first declining and then consolidating with fluctuations. At the industry level, reality and expectations remain in contention. On the real side, delayed PTA unit restarts combined with typhoon-induced shipping disruptions kept industry inventories at historical lows; spot basis diverged, and tight liquidity supported prices. On the expectation side, the market anticipates a pickup in PX and PTA supply, while PET remains at a loss with reduced operating rates; bottle chip and staple fiber production cuts raise demand-side concerns. Overall, cost disruptions and the expectation of rising supply with weakening demand are competing. The market swings sharply with geopolitical headlines, unit progress, and capital sentiment. Spot prices remain resilient on the back of tight near-term fundamentals, and the overall trend is a volatile consolidation after an initial spike and pullback.
Core logic:
Cost: The market first traded expectations of a US-Iran ceasefire and temporary Strait passage, ending crude's consecutive gains and rapidly unwinding the geopolitical premium. Subsequently, the US rejected the memorandum, clearing de-escalation expectations and providing renewed support to oil prices. However, resumed crude exports from Gulf countries limited significant upside, leaving costs in a fluctuating consolidation.
Supply-demand: Earlier, typhoons disrupted shipping, and delayed PTA unit restarts tightened spot liquidity and kept inventories at lows, supporting prices. But expectations of PX and PTA supply recovery persist, and under heavy PET losses, polyester operating rates are being cut. Bottle chip and staple fiber output cuts weaken downstream demand support, so the medium-term logic of rising supply and weak demand remains unchanged.
I. Industrial Profit Distribution: Polyester Raw Material Profits Compressed; Downstream Polyester Profits Diverged
As of this week (2026-08-20 to 08-27), chain prices were mixed. Naphtha, PX, and PTA were +1.79%, -1.88%, and -0.29% week-on-week, respectively. Polyester products diverged: polyester filament yarn, polyester staple fiber, PET bottle chip, and polyester chips were +3.65%, +1.20%, +2.05%, and +1.21%, respectively. In terms of profits, PXN narrowed, with the weekly average down 11.50% week-on-week to USD 270.67/mt. PTA processing fees were likewise compressed, up 15.52% week-on-week to RMB 677.53/mt. Melt costs stayed high, and polyester plant profits diverged. Filament yarn profits were decent but sales were sluggish, making it difficult to monetize margins. Bottle chip and staple fiber continued to post losses, with signs of production cuts.
II. Supply Environment: Supply Gradually Returning; Further Increases Expected
This week, PTA supply recovered. In terms of units, Dushan 2#, Honggang 3#, and Weilian units totaling 7.5 million mt of capacity restarted successively, while Dahua's 2.25 million mt unit was taken offline for reasons, delaying the pace of supply return. For basis, typhoons caused localized port closures, some suppliers reduced contract allocations, and spot liquidity remained tight. This week and next, trades for main-port September delivery were concluded at premiums of L+155 to L+400; spot traded at highs, and trades for main-port delivery before end-September were concluded at L+25 to L+120.
III. Demand Environment: Weaker Downstream Support; Demand Concerns Persist
On polyester supply: this week, the average sales-to-output ratio for polyester filament yarn was 52.92%, down 21 percentage points week-on-week. POY inventory stood at 15.1 days, up 2.1 days from the prior period; FDY inventory at 20.3 days, up 1.5 days; DTY inventory at 22.4 days, up 1.8 days. The average sales-to-output ratio for polyester staple fiber was 49.54%, down 11 percentage points week-on-week. Industry sentiment weakened, and downstream restocking enthusiasm was low. During the week, the polyester industry's weekly capacity utilization rate was 76.55%, down 1.48 percentage points week-on-week. In the near term, melt costs are high and industry losses are deepening. In particular, bottle chip and staple fiber have cut operating rates under loss pressure, directly weakening raw material demand support. The impact of the typhoons in Jiangsu and Zhejiang is gradually fading, but attention should be given to multi-typhoon logistics disruptions in South China. The end market has not seen a substantive recovery; downstream remains focused on just-in-time purchasing with no active restocking, so overall demand remains weak.
In the short term, low inventories and tight spot liquidity provide bottom support. Geopolitical disruptions create rebound opportunities, but the expectation of supply growth combined with weak demand caps the upside, and rebounds are likely to pull back; a range-bound approach is appropriate. In the medium term, as the supply return of PX and PTA materializes and weak polyester demand dominates, maintain a bearish bias on rallies. The four core variables to track are Middle East US-Iran geopolitical developments, Hormuz Strait navigation status, PTA and PX restart progress, and implementation of polyester production cuts.
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