Core Viewpoint - The polyester industry is facing production losses despite low inventory levels, leading to expectations of increased production cuts in July and August [1][5]. Group 1: Production and Inventory - As of June 27, the average operating load of polyester plants was 89.80%, a slight decrease of 0.74 percentage points from May, indicating limited production cuts [1]. - Polyester product inventories are currently not high, which may support future production levels. For instance, as of the end of June, the inventory days for various products were: POY at 16.6 days, FDY at 30.2 days, short fiber at 10.8 days, bottle chips at 17.3 days, and chip at 10.2 days [5]. Group 2: Profitability and Market Conditions - As of June 27, theoretical losses for polyester products were significant: 211 CNY/ton for short fiber, 210 CNY/ton for chip, and 339 CNY/ton for bottle chips, while long fiber had a theoretical profit of 95 CNY/ton [3]. - The demand for fiber products is expected to decline as the weather heats up, making it difficult for short fiber and chip to recover from losses, while long fiber profits may also decrease [3]. - The supply of bottle chips is excessive, and the seasonal demand for soft drinks has already been priced in, leading to expectations that bottle chips will also struggle to recover from production losses [3]. Group 3: Future Outlook - Despite the limited inventory pressure, the majority of polyester products are experiencing production losses, making it challenging for polyester plants to compete for profits within the supply chain, particularly against PX, which has strong de-inventory expectations [5]. - It is anticipated that polyester plants will increase production cuts, with operating loads potentially falling below 87% in July and August [5].