Market Overview - The PTA spot market showed improved trading sentiment compared to the previous day, with increased bids from polyester factories and a continued weak basis, leading to an expanded decline in the afternoon [1] - Main suppliers reported sales, with transactions this week and next week in the range of 4780 to 4820 yuan/ton, while the mainstream spot basis is at 09+91 [1] - As of July 8, the Zhengzhou Commodity Exchange had 45,812 PTA futures warehouse receipts, an increase of 9,384 from the previous trading day [1] Inventory and Supply Chain - This week, PTA factory inventory stands at 3.95 days, a decrease of 0.14 days from last week and 0.29 days from the same period last year [1] - Polyester factory PTA raw material inventory is at 7.1 days, down 0.35 days from last week and 1.08 days from the same period last year [1] Institutional Insights - Donghai Futures noted that while the PTA basis continues to weaken, there has been a partial recovery in transactions, with liquidity issues easing significantly [2] - The port inventory has increased, and with the cancellation of warehouse receipts and increased factory stocking, the upward impact of spot prices on the futures market has become limited [2] - Dadi Futures indicated that the polyester industry chain remains stable upstream, while expectations of declining downstream loads suggest profits will further shift downstream [2] - The oil price remains strong, and with downstream production cuts, the strategy of shorting PX/PTA based on Brent price differentials continues, although the potential for significant movement is limited [2] - As the peak season approaches in late August, there may be opportunities for PTA large manufacturers to adjust loads to expand profits, with current PTA processing fees being neutral [2]

Core Viewpoint - The PTA spot prices have been consistently stronger than futures since June, leading to heightened attention from industry chain enterprises, with the PTA basis average value rising by 40% year-on-year as of June 26 [1] Group 1: Supply and Demand Dynamics - The strengthening of the PTA basis is primarily due to a tight supply-demand structure, with polyester plant operating rates maintaining at 90%, the second-highest level of the year, indicating strong downstream demand [1] - In June, approximately 200,000 tons of PTA were de-stocked, continuing the de-stocking trend from the second quarter, while the main suppliers have slowed down their shipment pace, creating a seller's market [1] - The current PTA social inventory is at a neutral to low level, with tight circulating inventory further supporting the strong PTA basis [1] Group 2: Market Outlook and Potential Risks - Despite the current strength of the PTA basis, there are differing opinions on its sustainability, with expectations of potential production cuts in the polyester sector due to profit losses and inventory buildup [2] - Polyester production is expected to be 6.6 million tons in July, with PTA consumption potentially decreasing by 70,000 tons, and further reductions are anticipated in August during the demand off-season [2] - Key variables to monitor include geopolitical changes and oil price fluctuations, as well as the execution of production cuts in the polyester industry and the commissioning progress of new PTA facilities [2] Group 3: Cost Structure and Future Projections - The elasticity of the PTA cost side is also noteworthy, with a near-term strong performance expected due to low inventory supporting the basis and industry chain profits [3] - However, in the long term, the commissioning of new PTA facilities and reduced maintenance plans in the second half of the year, combined with the seasonal demand downturn, may limit the upward price potential of PTA [3] - The supply-demand structure of PX is currently better than that of PTA, and any unexpected maintenance of PX facilities could impact PTA prices positively [3]

Group 1: Report Industry Investment Rating - Not provided Group 2: Core Viewpoints of the Report - Terminal order demand fails to meet expectations, and the need to digest previous stockpiles will lead to continued difficulties in downstream shipments, inventory accumulation, and strong driving forces for downstream polyester plants to cut production. PTA demand will significantly decline starting from June [2]. - After June, multiple PTA plants will end maintenance, and new plants will be put into operation, leading to a significant increase in supply pressure. PTA may end the destocking phase in June, reaching a state of supply - demand balance or slight inventory accumulation, and the basis may decline [2]. - Against the backdrop of increasing PTA supply and decreasing demand, the basis in June will face the risk of falling from a high level, and the 9 - 1 structure, which has been pushed up by spot prices recently, may also decline. As crude oil is also under significant downward pressure due to increased production later, opportunities for the structure to decline can be observed for right - side entry [2]. Group 3: Summary by Relevant Catalogs 1. Strategy Overview - After more than half a month of tariff relaxation, the partial resumption of terminal orders fails to make up for the previous losses. Downstream chemical fiber profits remain low, and production cuts continue. The destocking amplitude in June may significantly decrease. Opportunities for 9 - 1 spread decline can be continuously monitored [6]. 2. Terminal Negative Feedback Still Has Room to Develop, and Downstream Production Cuts Have Continuous Driving Forces - After the tariff was announced, downstream production and sales soared, PTA basis increased significantly, and the spot 9 - 1 spread was continuously pushed up. In the short term, PTA destocking can continue, and the supply is favorable due to many maintenance devices. PTA spot liquidity is expected to remain tight in the short term [7]. - However, terminal and downstream negative feedback is the main logic recently. Terminal inventory is high, and the support for inventory procurement is low. Most enterprises' raw material inventory has reached over 30 days, and the average inventory usage in the industry can last until mid - June [9]. - Order recovery is lower than expected. The actual operable time within the 90 - day relaxation window is limited, and customers prefer finished products or fabrics. Terminal startup levels are still significantly lower than the annual average, and downstream chemical fiber production cuts are increasing [10]. - Although downstream profits have increased, it is only on paper. Long - filament enterprises are forced to accumulate inventory at high raw material prices, so production cuts are a reasonable choice. Downstream production cuts are expected to continue until mid - June, which will have a negative impact on polyester raw materials [18][23]. 3. Maintenance Returns and New Plants Are Put into Operation, and PTA May Maintain Supply - Demand Balance in June - By the end of May, the high PTA spot basis is due to high maintenance volume from April to May. In June, maintenance volume decreases significantly, and new plants will be put into operation, increasing supply pressure [24]. - The current spot tightness is due to the sharp reduction of short - term inventory in the circulation link. However, once the manufacturer's inventory accumulates, the basis may start to decline in mid - to late June. PTA processing fees support plant restart, and there will be more room for right - side operation [27]. - In terms of exports, the narrowing of the domestic - foreign price difference may weaken the PTA export strength of mainstream suppliers in June. Overall, PTA supply and demand in June may change from significant destocking to balance or slight inventory accumulation [29]. 4. Strategy: Wait for the Right - Side Entry Point for the Convergence of Monthly Spreads - Unless affected by sanctions, geopolitical factors, or production accidents, oil prices are likely to be shorted on rallies under OPEC+'s production resumption rhythm. If peak - season demand fails to meet expectations, it will be unfavorable for the polyester price center to continue rising [30]. - In the short term, the 9 - 1 spread is expected to remain high due to destocking. After June, the tight inventory in the circulation link is likely to be alleviated. The time for the PTA basis to drive the structure to decline can be observed from late June to July. Wait for the right - side entry opportunity after the long - position holders start to leave the market [32].