Report Summary 1. Investment Rating - Unilateral: Neutral - Inter - period: None - Inter - variety: None [3] 2. Core View - The price of EG rebounded due to macro - sentiment boost. The closing price of the EG main contract was 4410 yuan/ton (+34 yuan/ton, +0.78% compared to the previous trading day), and the spot price in the East China market was 4467 yuan/ton (+38 yuan/ton, +0.86% compared to the previous trading day). The news of the upcoming stable - growth work plan for ten key industries such as steel, non - ferrous metals, and petrochemicals boosted the market, but the proportion of EG's backward production capacity over 20 years old is only 6.6%, and most are in a shutdown or low - load operation state, so the increase is relatively limited [1]. - The production profit of ethylene - based EG was - 53 US dollars/ton (unchanged from the previous period), and that of coal - based syngas - to - EG was 47 yuan/ton (- 13 yuan/ton compared to the previous period) [1]. - According to CCF data, the MEG inventory in the main ports of East China was 53.3 tons (- 2.0 tons compared to the previous period); according to Longzhong data, it was 49.4 tons (+1.3 tons compared to the previous period). The actual arrival at the main ports last week was 5.2 tons, with a slight reduction in port inventory. The planned arrival at the East China main ports this week is 15.7 tons, and the visible inventory is expected to moderately increase early next week [2]. - In terms of the overall fundamental supply - demand logic, on the supply side, the domestic syngas - to - ethylene glycol load has returned to a high level, and there are more unplanned load reductions in non - coal sectors, with limited room for further improvement. Overseas supply recovery is not as expected. On the demand side, the terminal inventory is high in the off - season, and the stocking willingness is low, with a weak demand expectation. The actual decline space may be limited. The supply - demand structure in July is still benign, but the arrival pressure of foreign ships will moderately increase in late July [2]. 3. Summary by Directory Price and Basis - The closing price of the EG main contract was 4410 yuan/ton (+34 yuan/ton, +0.78% compared to the previous trading day), and the spot price in the East China market was 4467 yuan/ton (+38 yuan/ton, +0.86% compared to the previous trading day). The East China spot basis (based on the 2509 contract) was 62 yuan/ton (+3 yuan/ton compared to the previous period) [1]. Production Profit and Operating Rate - The production profit of ethylene - based EG was - 53 US dollars/ton (unchanged from the previous period), and that of coal - based syngas - to - EG was 47 yuan/ton (- 13 yuan/ton compared to the previous period) [1]. International Spread - The international spread of ethylene glycol (US FOB - China CFR) is presented in the report, but no specific data is given [19]. Downstream Sales, Production, and Operating Rate - The report mentions downstream indicators such as filament sales, staple fiber sales, polyester load, direct - spun filament load, polyester staple fiber load, and polyester bottle chip load, but no specific data is provided [20][22][24]. Inventory Data - According to CCF data, the MEG inventory in the main ports of East China was 53.3 tons (- 2.0 tons compared to the previous period); according to Longzhong data, it was 49.4 tons (+1.3 tons compared to the previous period). The actual arrival at the main ports last week was 5.2 tons, with a slight reduction in port inventory. The planned arrival at the East China main ports this week is 15.7 tons, and the visible inventory is expected to moderately increase early next week [2].

Summary of PTA Industry Conference Call Industry Overview - The PTA (Purified Terephthalic Acid) industry is experiencing significant price fluctuations, with PX (Paraxylene) prices rebounding by 42.5% in mid-May 2025, indicating structural changes in supply and demand due to tight upstream supply [1][3] - No new capacity for PX and PTA is expected in the first half of 2025, while downstream polyester capacity is projected to increase by approximately 1 million tons [1][5] Key Points and Arguments - **Price Recovery**: From late April to mid-May, crude oil prices increased by 3.6%, PTA prices rose by 9.5%, and PX prices surged by 42.5%. The PTA basis has rapidly recovered to levels not seen in the past two years [3][4] - **Processing Fees**: PTA processing fees reached 388 RMB/ton, while PX processing fees increased from 184 RMB/ton to 276 RMB/ton, reflecting a significant demand-supply imbalance [4][10] - **Inventory Trends**: The inventory cycle from January to April 2025 showed a reduction of 200,000 tons, contrasting with a buildup of 750,000 tons in the same period last year. The current warehouse receipt volume is only 350,000 tons, indicating rapid liquidity contraction [6][21] - **Impact of Trade Tariffs**: U.S. tariffs on Chinese goods have led to uncertainty in export orders, causing a decline in operating rates in the terminal manufacturing and dyeing industries [7][8] - **Market Dynamics**: Despite a pessimistic market sentiment, polyester factories increased their inventory due to significantly lower raw material prices, leading to an adjustment in production loads in May [9][13] Additional Important Insights - **Future Capacity Expansion**: The PTA industry is expected to see a significant increase in production capacity in 2025, with a total of 8.7 million tons projected to come online, compared to 7.5 million tons in 2024 [30][32] - **Old Capacity Elimination**: From 2019 to 2024, approximately 14.58 million tons of outdated capacity have been eliminated, which has impacted overall industry capacity and operational rates [27][30] - **Market Sentiment**: The current market sentiment is cautious, with expectations that the rapid price increases may slow down as polyester production cuts are anticipated [22][24] - **Long-term Outlook**: The PTA industry may see a turning point in 2026, with new PX supply entering the market and the potential for improved market conditions [33][34] Conclusion The PTA industry is navigating a complex landscape characterized by price volatility, inventory management challenges, and the impacts of trade policies. The upcoming capacity expansions and the elimination of outdated production facilities are expected to shape the market dynamics in the near future.