Core Viewpoint - The chemical industry is expected to see an improvement in supply-demand structure and competitive landscape by 2026, leading to a valuation recovery in the sector. Market sentiment is shifting towards undervalued chemical equity assets, positively impacting commodity markets and driving up chemical futures prices [1]. Supply Side - As of January 30, domestic PX operating rates are at a historical high of 89.2%, with a weak maintenance schedule compared to previous years, and overseas plants planning to increase output, indicating a generally ample supply [1]. - The PX-MX price spread has strengthened, reaching a five-year high, driven by high profits encouraging factories to source MX for PX production [1]. - PTA processing fees averaged 359.7 RMB/ton in January, a year-on-year increase of 22.1%, with processing fees recovering to a six-month high due to PX price increases lagging behind PTA [3]. Demand Side - As of January 30, terminal operating rates have declined, with the comprehensive operating rate for Jiangsu and Zhejiang weaving machines at 34.0%, and the overall demand is expected to weaken as factories begin early holidays, averaging 30-40 days off [4]. - The polyester sector is facing a reduction in operating rates, with approximately 17.4% of national capacity planned for maintenance in January-February, leading to increased pressure on inventory levels post-holiday [6]. - Despite a decline in textile exports, there is resilience in some Southeast Asian orders, but overall domestic demand remains weak, with limited replenishment expected post-holiday [8][9]. Market Outlook - The PTA spot basis is expected to weaken due to reduced polyester production and declining terminal demand, leading to inventory accumulation pressures in the first quarter [9]. - The market anticipates that PTA futures prices will fluctuate, with mid-term investors advised to wait for a pullback to the 5000-5100 RMB/ton support area before entering long positions [9].