Group 1 - The core viewpoint is that despite short-term volatility, the price spread between benzene and naphtha is expected to return to a reasonable range in the long term, contingent on low benzene inventories in the U.S. [1] - Southeast Asia is anticipated to become a major source of benzene exports due to new production capacity, posing a challenge to Northeast Asia's traditional export status [1] - The price of benzene has seen significant fluctuations, dropping from an average spread of over $300/ton to around $150/ton, raising concerns about the future of the benzene industry [1] Group 2 - Historical data shows that the peak price spread between benzene and naphtha exceeded $500/ton, primarily driven by surging gasoline demand in the U.S. [1] - The price spread is projected to maintain between $160 and $250/ton by the end of 2026, indicating a reasonable range of fluctuations, although market volatility is expected to persist [1] - Northeast Asia remains the largest benzene exporter, but the shutdown of cracking facilities in South Korea and Japan is accelerating capacity consolidation [2]

1. Report Industry Investment Rating - The investment view is "oscillation", and it is expected to be mainly bullish, with no obvious driving factors [4]. 2. Core View of the Report - The supply side is bearish as crude oil prices fall, domestic PTA device supply gradually returns, and the PTA basis weakens [4]. - The demand side is bullish as the downstream load of polyester maintains around 91%, and the inventory performance of polyester factories is optimistic [4]. - The inventory situation is neutral as the port inventory of PTA decreased by 10,000 tons this week and continues to decline [4]. - The basis is bearish as the PTA basis weakens slightly, and the PTA profit remains at a low level [4]. - The profit is bearish as the spread between PX and naphtha is at $230, and the PTA processing fee remains at around 200 yuan and has shrunk [4]. - The valuation is neutral as the PTA price is at a moderately low level, and the supply of aromatics has increased [4]. - The macro - policy is neutral as the Ministry of Finance continues to implement a package of debt - resolution measures [4]. 3. Summary by Relevant Catalogs 3.1 Part One: Main Views and Strategy Overview - Supply: Bearish. Crude oil price decline, increased supply from Huizhou PTA in China, and weakening PTA basis [4]. - Demand: Bullish. Polyester downstream load around 91%, optimistic inventory, and increased load in bottle - chip varieties [4]. - Inventory: Neutral. PTA port inventory decreased by 10,000 tons this week [4]. - Basis: Bearish. Slightly weakened PTA basis and low profit [4]. - Profit: Bearish. PX - naphtha spread at $230, and PTA processing fee around 200 yuan with contraction [4]. - Valuation: Neutral. PTA price at a moderately low level, increased aromatics supply [4]. - Macro - policy: Neutral. Ministry of Finance's debt - resolution measures [4]. - Investment view: Oscillation, expected to be mainly bullish [4]. - Trading strategy: Unilateral - wait and see, pay attention to geopolitical risks [4]. 3.2 Part Two: Oil Product Fundamental Overview - Gasoline: Peak - season destocking but approaching off - season. Refinery operating rate decreased from 94.6% to 94.3%, gasoline inventory decreased by 3.8 million barrels, and demand is expected to enter the off - season [25]. 3.3 Part Three: Aromatics Fundamental Overview - Some devices plan maintenance, and Yulong Petrochemical's supply increases [33]. - Asian naphtha price is firm, gasoline cracking spread rebounds slightly, and the spread between regular gasoline and naphtha cracking widens [44]. - The profit of selective disproportionation of aromatics decreases slightly [49]. - MX cross - regional arbitrage is marginally feasible, and the spread between the US and South Korea is around $187 [54]. - Asian MX spot price weakens, and the spread between MX and naphtha narrows to $88/ton [61]. - The gasoline reforming and aromatics reforming are both acceptable, but PTA performs weakly due to falling crude oil prices and weakening basis [72]. 3.4 Part Four: Polyester Fundamental Overview - Ethylene glycol: Supply returns, and the price is weak. The port inventory in East China is 459,000 tons and is expected to continue to decline [86]. - Gasoline: The load of major refineries increases [88]. - Polyester: The load maintains at a high level, and the production increases, waiting for downstream feedback [95][107].

1. Report Industry Investment Rating - The investment view is "oscillating" [3] 2. Core View of the Report - The market's supply is increasing, and the overall expectation is bearish, with the market expected to oscillate [3] 3. Summary by Relevant Catalogs PART ONE: Main Views and Strategy Overview - **Supply**: Domestic PTA device supply is gradually recovering, with increased supply from Huizhou, and the PTA basis is weakening. The spread between PX and naphtha is expanding, and the spread between PX and MX is rising [3] - **Demand**: The downstream load of polyester remains at around 88%, and the inventory of polyester factories is optimistic. The bottle - chip device maintenance is also recovering. With the recent improvement in sales and inventory reduction, polyester prices are performing well, especially for filaments. However, FDY production cuts are imminent [3] - **Inventory**: PTA port inventory is declining, entering a destocking cycle, with a reduction of 20,000 tons this week [3] - **Basis**: The PTA basis is rapidly weakening, and the liquidity in the PTA market is becoming looser due to the return of South China devices [3] - **Profit**: The spread between PX and naphtha is at $260, and the spread between PX and MX is expanding. The PTA processing fee remains at around 200 yuan and is contracting [3] - **Valuation**: PTA prices are at a moderately low level. As the reforming devices gradually recover, the supply of aromatics is increasing [3] - **Macro - policy**: Positive influence from relevant political meetings [3] - **Investment view**: Market is expected to oscillate due to bearish market expectations and increased supply [3] - **Trading strategy**: For unilateral trading, it is recommended to wait and see, and pay attention to geopolitical risks [3] PART TWO: Overview of Oil Product Fundamentals - **Oil market news**: On August 29, the Political Bureau of the CPC Central Committee held a meeting. Indian refineries' September imports of Russian oil are expected to increase by 10% - 20% (150,000 - 300,000 barrels per day) compared to August. Ukrainian attacks on Russian refineries have affected up to 17% of its refining capacity [7] - **Gasoline market**: In the peak season, gasoline inventory is decreasing. North American refinery loads are continuously rising. However, as the driving season is about to end, gasoline demand will enter the off - season, and it is difficult to form strong market expectations. The demand for reformate in gasoline blending is still much better than that for chemicals, and the demand for benzene, toluene, and MX at the terminal remains weak [24] PART THREE: Overview of Aromatics Fundamentals - **Aromatics supply**: The supply of PX is expected to recover. North American and Asian naphtha prices are weakening, and the spread between naphtha and Brent crude oil is narrowing. The premium between Asian 97RON premium gasoline and regular gasoline continues to rise, and the lower naphtha price has increased the profit margin of reforming devices [48] - **Aromatics profit**: The profit from selective disproportionation is declining. The spread between PX and mixed xylene has increased to $127/ton, still generating positive returns. The consumption in the gasoline blending industry remains low, while the output of traditional derivative industries remains stable [54] - **Reforming device**: Although the supply of naphtha has eased, the demand is expected to decline due to planned maintenance in the third quarter. The demand for PX remains healthy, and the spread between PX and naphtha has risen to $265. After the completion of planned maintenance, the supply of PX has increased [61] - **Korean market**: There are expectations of production cuts in Korean naphtha cracking devices, and the market is in a period of sentiment fermentation and waiting for news verification [70] PART FOUR: Overview of Polyester Fundamentals - **Ethylene glycol**: There are rumors of major reforms in the domestic petrochemical and refining industries. Korean naphtha cracking devices plan to cut production, causing a significant increase in olefin varieties. Overseas ethylene glycol device maintenance has been postponed, and the supply is expected to shrink, with a decrease in expected arrivals [82] - **Gasoline**: Gasoline profits are recovering, and the load of major refineries is rising [84] - **Polyester**: The supply side of bottle - chips is gradually recovering. Raw material prices are stable, and terminal demand is optimistic [90][100]

1. Report Industry Investment Rating - The investment view for polyester is "oscillating", with an expectation of being mainly bearish due to the lack of obvious driving factors [3]. 2. Core View of the Report - The sentiment in the polyester market has significantly weakened, and the fundamentals of PTA have slightly deteriorated. There are mixed factors in supply, demand, inventory, basis, profit, valuation, and macro - policies, leading to an oscillating market outlook [3]. 3. Summary by Relevant Catalogs 3.1 Main Views and Strategy Overview - **Supply**: Polyester load has declined, reducing PTA demand. PTA port inventory has decreased. The spread between PX and naphtha has expanded to around $240, while the profit margins of alkylation transfer and TDP are not optimistic. The spread between PX and MX remains around $100 [3]. - **Demand**: The downstream load of polyester remains at 88%. The main polyester production cuts are concentrated in short - fiber and bottle - chip varieties, which will affect polyester load. As PTA prices recover, the load of the weaving end has declined [3]. - **Inventory**: PTA port inventory has decreased by 35,000 tons this week, entering a destocking cycle [3]. - **Basis**: The PTA basis has weakened rapidly. As PTA device profits recover, the number of devices has increased rapidly, and market liquidity is slightly tight [3]. - **Profit**: The spread between PX and naphtha is $240, and the spread between PX and MX has shrunk. PTA processing fees are maintained at around 250 yuan and have contracted [3]. - **Valuation**: PTA prices are at a moderately low level. As reforming devices gradually recover, aromatics supply has increased, and the expansion of gasoline profits has boosted demand [3]. - **Macro - policy**: There is uncertainty in India's oil import policy from Russia due to Trump's threat of punishment, but Indian officials say the policy remains unchanged [3][9]. - **Investment View**: The market is expected to oscillate, mainly bearish due to the lack of obvious driving factors [3]. - **Trading Strategy**: For unilateral trading, it is recommended to wait and see, and attention should be paid to geopolitical risks [3]. 3.2 Oil Product Fundamentals Overview - **Crude Oil**: The US is sanctioning Russian crude oil. Trump threatened to punish India if it does not cut off Russian oil imports, but Indian officials will continue to import [5][9]. - **Gasoline**: Demand is strong during the peak season. North American refinery loads remain high. Diesel price increases drive up crude oil prices, and crude oil inventory has increased continuously. Refinery operating rates are high, gasoline production exceeds 9.9 million barrels, but imports have decreased. Finished gasoline inventory decline supports crude oil and gasoline prices. The spread between European gasoline and naphtha remains at $150 [10][16][24]. 3.3 Aromatics Fundamentals Overview - **Domestic Reforming Devices**: Loads are gradually recovering. North American reforming device profit margins remain unchanged, while reforming octane profit margins have slightly increased, and BTX extraction profit margins have slightly declined. Aromatics extraction demand can be met internally [27][43]. - **Selective Disproportionation**: Profits have shrunk. The economic viability of North American TDP and STDP is weak, and MX supply may decrease, but STDP profit margins have been positive for about two months [44][50]. - **Polyester Load**: It has started to decline. PX pricing is closely linked to futures after the listing of PX futures. PTA processing intervals are long - term below 500 yuan, and option - based income - enhancement schemes are more widely used. Short - fiber and bottle - chip industries are in the capacity - expansion cycle, and overseas demand is an important variable, with new export opportunities along the "Belt and Road" [51][55]. - **Reforming Device Maintenance**: It is gradually returning. Asian naphtha markets have strengthened slightly, and the cracking spread of naphtha - Brent crude oil has improved. Asian gasoline remains strong, but gasoline reforming profit margins have declined. Asian spot MX supply is still sufficient [56][57]. - **Gasoline and Aromatics Reforming**: Both have strengthened. Domestic commodity sentiment has weakened, polyester downstream load has decreased to 88%. PTA spot has become slightly more abundant, and port inventory has decreased. PTA basis has dropped from 0 to - 20. Some reforming device overhauls have been postponed, and bottle - chip manufacturers have started production - cut plans [63]. 3.4 Polyester Fundamentals Overview - **Ethylene Glycol**: Prices have rebounded due to rising coal prices and improved macro - sentiment. Overseas device overhauls, especially in Saudi Arabia, have been postponed, and future arrivals are expected to decrease. Polyester production and sales have weakened, and the industry has entered an overhaul cycle, which has a negative impact on the market [70][77]. - **Gasoline**: Profits have recovered, and the load of major refineries has increased [79]. - **Polyester**: Downstream demand has weakened, and bottle - chip and short - fiber production facilities are undergoing maintenance. Raw material prices have risen, while terminal demand has weakened [87][94].

Report Industry Investment Rating - The investment view is "oscillating", with no obvious driving force and expected to be mainly bearish [3] Core View of the Report - The supply of PTA is bearish as domestic production is at a historical high, and factors like benzene price weakness and profit margins limit PX production increase. The demand is also bearish as polyester downstream load is expected to decrease, and major polyester factories in short - fiber and bottle - chip segments plan to cut production in July. The PTA is in a stockpiling cycle, with port inventory increasing by 30,000 tons this week. The PTA basis has weakened rapidly, and its processing fee has shrunk. PTA price is at a neutral - low level, and the macro - policy has a neutral impact [3] Summary by Relevant Catalogs 1. Main Views and Strategy Overview - Supply: Domestic PTA production is at a historical high, port inventory is decreasing, and a large number of warehouse receipts are being cancelled. The spread between PX and naphtha has expanded to about $230 - 240, but benzene price weakness restricts PX production increase. The spread between PX and MX is about $90, which drives the recovery of PX load [3] - Demand: Polyester downstream load remains above 91% despite the expected reduction. Polyester factories' inventory is optimistic. Major production cuts are expected in short - fiber and bottle - chip segments in July, which will affect polyester load. As PTA price recovers, polyester's ability to absorb PTA price weakens, and weaving profit is compressed [3] - Inventory: PTA port inventory has accumulated, and it has entered a stockpiling cycle, with a 30,000 - ton increase in port inventory this week [3] - Basis: PTA basis has weakened rapidly. As PTA device increases with profit recovery and demand weakens, the market liquidity becomes looser [3] - Profit: The spread between PX and naphtha is $230, and the spread between PX and MX has shrunk. PTA processing fee remains at about 300 yuan and has contracted [3] - Valuation: PTA price is at a neutral - low level. As reforming devices gradually recover, aromatic supply increases, but gasoline profit is poor, and blending demand recovers [3] - Macro - policy: Trump plans to impose tariffs ranging from 60% - 70% and 10% - 20% on different countries starting August 1st [3][8] - Investment view: Oscillating, with no obvious driving force and expected to be mainly bearish [3] - Trading strategy: Unilateral: Wait and see [3] 2. Oil Product Fundamentals Overview - Policy: Trump plans to impose tariffs; the "Big and Beautiful Act" supports oil, gas, and coal production and restricts wind and solar energy; OPEC + is discussing an 81,100 - barrel - per - day production increase in August [8] - Gasoline: There are still concerns about the gasoline peak season. EIA data shows that the total inventory is 150,000 barrels, approaching 230 million barrels. Refinery operating rate has exceeded 94%, increasing gasoline production from 9 million barrels to 9.7 million barrels. North American refinery load is rising, and gasoline cracking profit shows a seasonal upward trend [23] 3. Aromatic Fundamentals Overview - MX: North American reforming device profit margin remains unchanged. The demand for MX in Asia is strong due to PX demand. Currently, tariffs hinder MX cross - regional arbitrage, but it is still marginally feasible. Asian spot MX supply is sufficient, and domestic mainstream reforming and aromatic extraction device productivity is decreasing [37][50][57] - PX: It is the core of polyester industry price fluctuations. After the listing of PX futures, its pricing is closely linked to futures [49][56] - PTA: Due to large domestic production capacity, the PTA processing interval has long been maintained below 500 yuan. With the launch of new devices and capacity, the option - based income - enhancement plan is more widely used [49][56] - Short - fiber and bottle - chip: They are in the capacity launch cycle. Overseas demand is an important variable, and the "Belt and Road" initiative provides new export opportunities [49][56] 4. Polyester Fundamentals Overview - Ethylene glycol: Coal - price decline expands coal - based ethylene glycol profit. There will be a large amount of ethylene glycol arriving at ports later. Polyester production and sales are weakening, and it is entering the maintenance cycle [81] - Gasoline: Gasoline profit is recovering, and the load of major refineries is increasing [82] - Polyester: Downstream demand is weakening, and bottle - chip and short - fiber are in the maintenance period. Raw material prices are rising, and terminal demand is weakening [90][97]

Summary of the Conference Call for Rongsheng Petrochemical Industry Overview - The Chinese petrochemical industry is experiencing a slowdown in capacity growth, with refining capacity nearing the 1 billion tons threshold, limiting new capacity additions. [2][3] - The global refining industry is undergoing consolidation, with European and American companies gradually shutting down some refineries. It is projected that from 2025 to 2030, global new capacity additions will average only 400,000 barrels per day. [2][3] - Aromatics capacity growth is also slowing, with a domestic compound growth rate of approximately 3%. The supply structure remains healthy, but Japanese and Korean facilities are reducing their operating rates due to economic inefficiencies. [2][4] Key Insights on Company Performance - In Q1 2025, all segments of Rongsheng Petrochemical reported profits, with refining generating 1.2 billion yuan. The PTA and polyester segments also showed profitability. [11] - The company is transitioning from a focus on refined oil products to chemical products, aiming to reduce refined oil yield to below 20% and enhance sales and production flexibility. [2][7][8] - The company holds an export quota of 3.7 million tons and is actively pursuing integrated upgrades to improve operational efficiency. [7][8] Future Supply and Demand Dynamics - The demand for refined oil has peaked, particularly for diesel and gasoline, which are significantly impacted by the rise of electric vehicles. By 2030, refined oil consumption is expected to gradually decline. [7] - The aromatics market is optimistic, with stable demand from PTA and downstream polyester sectors. The breakeven point for PX to naphtha is around $100 per ton, significantly better than the global average of $300 per ton. [9][10] Challenges and Risks - The tightening of policies has made it difficult to obtain new approvals for olefins, with the possibility of new permits being extremely low. [5] - The operating rate of Shandong's local refineries has dropped from 60% to 40%, influenced by peak refined oil demand and tightening tax policies, leading to a gradual market exit. [6] - Geopolitical tensions, particularly in the Middle East, could impact raw material supply and pricing, although the company has maintained stable production and sales rates. [12] Strategic Initiatives - The company is investing in high-performance resins and high-temperature new materials, with projects expected to be completed by the end of 2025 and 2026, respectively. [15] - Capital expenditure plans for the polyester and PTA segments are being adjusted, with no new projects planned as existing capacities have been fully utilized. [16] - The company is also exploring coal chemical projects in Inner Mongolia, pending national approval. [20] Financial Management - The major shareholder has been actively increasing their stake since 2024, with a total investment of 1.7 billion yuan across three buyback phases, aimed at enhancing investor confidence. [21] - The company aims to reduce its debt ratio to below 70% by improving operational cash flow, with expectations of further cash flow enhancement as projects are implemented. [22] Conclusion - Rongsheng Petrochemical is navigating a challenging environment marked by capacity constraints and shifting demand dynamics. The company is strategically repositioning itself towards chemical production while managing risks associated with geopolitical tensions and regulatory changes. The outlook for the aromatics market remains positive, supported by strong domestic demand and competitive advantages in production costs. [2][9][10]

Core Viewpoint - The upcoming launch of pure benzene futures and options on the Dalian Commodity Exchange is expected to enhance risk management tools for the aromatic industry and stabilize supply chains in the sector [2][3][4]. Industry Impact - The volatility of pure benzene prices, influenced by oil price fluctuations and market supply-demand changes, has been significant, with prices ranging from 2,380 yuan/ton in 2020 to 10,305 yuan/ton in 2022, reflecting an annual volatility rate exceeding 40% [2]. - The introduction of futures and options is seen as a strategic move to provide companies with better tools for managing price fluctuations, moving away from limited methods such as long-term contracts and dynamic inventory adjustments [2][3]. Company Strategies - Companies like Sinopec Sales and Northeast Petroleum International are planning to utilize the new futures and options for hedging against price volatility, transitioning from fixed-price contracts to a model based on "futures price + premium/discount" [3]. - Sinopec Sales aims to integrate pure benzene futures into their inventory and trading processes, while other companies are establishing specialized teams to explore combinations of futures pricing and options protection [3]. Global Pricing Dynamics - The launch of pure benzene futures and options is expected to reshape the global chemical pricing landscape, moving China from a position of "Chinese demand, international pricing" to establishing a "Chinese pricing" system [4]. - Currently, China's import dependency for pure benzene is around 15%, with over 4 million tons imported annually, primarily priced based on Korean offshore prices. The development of a domestic pricing system is deemed essential for aligning with China's industrial strength [4]. - The core value of the new futures and options lies in price discovery and innovation, promoting a more resilient "Chinese pricing system" within the global chemical industry [4].

Report Industry Investment Rating - Short - term PX/PTA/PF/PR rating: Neutral [4] Core View - On Wednesday, major polyester filament manufacturers increased production cuts, and the prices of the industrial chain fluctuated weakly. The market is currently focused on the Iran - US nuclear talks and the OPEC+ eight - country ministerial meeting on June 1st, with no news to guide the oil price, which is in a consolidation phase. The gasoline cracking has rebounded recently, but the seasonal performance is still weaker than in the previous two years. The aromatics blending demand this year is not worth much expectation. The domestic and international intermittent blending demand can be basically met by naphtha, limiting the enthusiasm of aromatics to enter the gasoline pool. The supply of PX has recovered, but the spot market is still tight. The PTA price has rebounded, and some device overhauls have been postponed. The polyester demand is strong in the short term but may weaken in mid - to - late June [1][2][3]. Summary According to Related Catalogs I. Price and Basis - The report shows the TA main contract, basis, and inter - period spread trends, PX main contract trends, basis, and inter - period spread, PTA East China spot basis, and short - fiber 1.56D*38mm semi - dull natural white basis [8][9][11] II. Upstream Profits and Spreads - It includes PX processing fee PXN, PTA spot processing fee, South Korean xylene isomerization profit, and South Korean STDP selective disproportionation profit [16][19] III. International Spreads and Import - Export Profits - The report presents the toluene US - Asia spread, toluene South Korea FOB - Japan naphtha CFR, and PTA export profit [24][26] IV. Upstream PX and PTA Startup - Information on the startup of Chinese, South Korean, and Taiwanese PTA, as well as Chinese and Asian PX is provided [27][30][32] V. Social Inventory and Warehouse Receipts - Data on PTA weekly social inventory, PX monthly social inventory, PTA total warehouse receipts + forecast volume, PTA warehouse receipt inventory, PX warehouse receipt inventory, and PF warehouse receipt inventory are given [35][38][39] VI. Downstream Polyester Load - It contains data on filament production and sales, short - fiber production and sales, polyester load, direct - spinning filament load, polyester staple fiber load, polyester bottle - chip load, filament factory inventory days, and the operating rates of Jiangsu and Zhejiang looms, texturing machines, and dyeing machines [47][49][59] VII. PF Detailed Data - Details on polyester staple fiber load, factory equity inventory days, 1.4D physical inventory, 1.4D equity inventory, recycled cotton - type staple fiber load, raw - recycled spread, pure polyester yarn operating rate, pure polyester yarn production profit, polyester - cotton yarn operating rate, polyester - cotton yarn processing fee, and factory inventory available days are provided [71][80][84] VIII. PR Fundamental Detailed Data - Information on polyester bottle - chip load, bottle - chip factory inventory days, bottle - chip spot processing fee, bottle - chip export processing fee, bottle - chip export profit, East China water bottle - chip - recycled 3A - grade white bottle - chip spread, bottle - chip next - month spread, and bottle - chip next - next - month spread is presented [92][94][102]