Report Summary 1. Report Industry Investment Rating No specific industry investment rating is provided in the report. 2. Core Views - The mid - term trends of p - xylene (PX), purified terephthalic acid (PTA), and monoethylene glycol (MEG) are still weak. Before the holiday, attention should be paid to position management. For MEG, a 1 - 5 month spread reverse arbitrage is recommended [1]. - The trend intensities of PX, PTA, and MEG are all neutral (0) [3]. 3. Summary by Related Catalogs Market Data - **Futures Data**: The previous day's closing prices of PX, PTA, MEG, PF, and SC futures were 6656, 4646, 4213, 6326, and 491.3 respectively, with changes of - 18, - 32, - 33, - 46, and 0.7, and percentage changes of - 0.27%, - 0.68%, - 0.78%, - 0.72%, and 0.14% [2]. - **Month - spread Data**: The previous day's closing prices of PX1 - 5, PTA1 - 5, MEG1 - 5, PF12 - 1, and SC11 - 12 month - spreads were - 32, - 46, - 63, - 44, and - 0.8 respectively, with changes of 10, - 6, 1, 0, and 0.3 [2]. - **Spot Data**: The previous day's spot prices of PX CFR China, PTA East China, MEG, naphtha MOPJ, and Dated Brent were 814 dollars/ton, 4590 yuan/ton, 4300 yuan/ton, 608 dollars/ton, and 71.92 dollars/barrel respectively, with changes of - 3, 0, 10, - 0.5, and 1.39 [2]. - **Spot Processing Fee Data**: The previous day's spot processing fees of PX - naphtha spread, PTA processing fee, short - fiber processing fee, bottle - chip processing fee, and MOPJ naphtha - Dubai crude oil spread were 206 dollars/ton, 217.21 yuan/ton, 222.06 yuan/ton, 59.94 yuan/ton, and - 6.01 respectively, with changes of - 2.5, 19.02, - 12.24, - 29.3, and 0 [2]. Market Dynamics In 2025, on September 5, the US White House issued a presidential order, canceling the exemption from reciprocal tariffs for the tariff codes 3907.61.00 and 3907.69.00 related to polyester bottle chips, and including polyester bottle chips in the scope of reciprocal tariff collection. Recycled PET now has the same tariff system as virgin PET [2]. Views and Suggestions - **PX**: The unilateral trend may still be weak, and a 1 - 5 reverse arbitrage is recommended. The PXN position for compression should be closed with a profit. The domestic PX operating rate is 86.7% (+0.4%), and the Asian PX operating rate is 78% (-0.2%). The PTA load is 76.8% (-). The PTA processing fee has recovered to 217 yuan/ton, and PXN has dropped to 206 dollars/ton. Overseas reforming profits are low, and South Korean plants may reduce their loads in the future. Attention should be paid to the support of overseas MX blending demand for PX valuation [4]. - **PTA**: The unilateral trend may still be weak, and a 1 - 5 reverse arbitrage is recommended. Short the PTA processing fee of 01/05 contracts on rebounds. The PTA load is 76.8% (-). The polyester operating rate this week is 90.3% (-1.3%). Although there are unplanned production cuts, the supply surplus in East China is still difficult to change, and the basis is difficult to strengthen significantly. In the medium - to - long term, the inventory pressure of polyester factories is expected to rise again after the holiday [5]. - **MEG**: The unilateral trend may still be weak, and a 1 - 5 reverse arbitrage is recommended. The overall operating load of ethylene glycol in the Chinese mainland is 73.08% (down 1.85% from the previous period). Factories have announced maintenance plans for October - November. The polyester operating rate this week is 90.3% (-1.3%). The ethylene glycol supply - demand balance sheet is still strong in the near - term, and the basis is expected to be strong [6].

Summary of PTA Industry Conference Call Industry Overview - The PTA industry exhibits an oligopolistic structure, with the top two factories accounting for over 54% of total production in China [2][4] - Despite oversupply, exports have reached historical highs due to strong foreign demand and aging facilities [2][4] - The industry is entering a slow growth phase, with significant declines in new capacity expected in the coming years [1][4] Key Insights - **Production Capacity**: No new PTA facilities are expected to come online in 2026, with only a small amount anticipated in 2027 [4][5] - **Price Dynamics**: The price spread for PTA is expected to improve in 2026, especially if the Yantai PS facility is operational, allowing PTA to capture more profits from raw materials [5][6] - **Industry Coordination**: The PTA, PX, and filament industries are closely linked, showing synchronous performance. Recent measures to reduce production and eliminate outdated capacity aim to enhance product profitability [6][8] Market Conditions - **Supply and Demand**: Domestic PTA market relies on downstream demand and exports to alleviate oversupply. The competition in international markets is intensifying [3][12] - **Operational Rates**: Current industry operating rates are high, but the presence of "zombie" capacities poses challenges. If new capacities are fully utilized, the industry may face pressure [11][14] - **Old Facilities**: Old PTA facilities have low restart costs and can quickly resume production if market conditions are favorable [19][20] Future Projections - **Capacity Growth**: Future growth rates for PTA are projected to decline to about 3% to 5% [4][12] - **Downstream Demand**: The polyester industry is expected to see a planned production of 3.9 million tons in 2026, but actual output may be lower [4][7] - **Profitability Challenges**: Despite high operating rates, profitability remains constrained due to raw material price fluctuations and the integrated purchasing strategies of refining enterprises [14][16] Additional Considerations - **Export Markets**: China is shifting its export focus, with Turkey expected to become a major customer in 2026 due to changes in demand dynamics [12][17] - **Logistics Issues**: Delays in logistics and storage can lead to raw materials being unable to clear quickly, impacting cash flow [23] - **Hedging Strategies**: Most companies engage in hedging to manage risks associated with spot price volatility, with over 99% of PTA spot transactions linked to futures pricing [3][22] This summary encapsulates the critical points discussed in the conference call regarding the PTA industry, highlighting its current state, future outlook, and the interconnectedness of various segments within the industry.