Report Industry Investment Rating - Not provided in the content Core Viewpoints - The market focus is on the Iran situation, with rising crude oil prices due to tensions. PXN has been significantly compressed, and concerns about supply disruptions are pushing up naphtha prices, while PX's upward momentum is limited by poor downstream polyester demand. The situation's impact on PX load and inventory is expanding [1]. - PTA's cost is supported, but it's in a state of inventory accumulation. In the long - term, PTA processing fees are expected to improve after the end of the capacity expansion cycle. The polyester and weaving loads are stable, but downstream price increases are weak, and there are more voices of production cuts [2]. - PF has negative production profits, with heavy downstream wait - and - see mentality. PR's processing fees are still relatively high, and the inventory of bottle - chip factories remains low [3]. - For trading strategies, it is recommended to cautiously go long on PX/PTA/PF/PR for hedging. It is not advisable to chase up or sell down due to the complexity of the current market [4]. Summary by Directory Price and Basis - Figures show TA and PX's main contract trends, basis, and inter - period spreads, as well as PTA's East China spot basis and short - fiber basis [9][10][15] Upstream Profits and Spreads - Include PX processing fees, PTA spot processing fees, South Korean xylene isomerization profits, and South Korean STDP selective disproportionation profits [17][21] International Spreads and Import - Export Profits - Cover toluene's US - Asia spread, toluene's South Korean FOB - Japanese naphtha CFR spread, and PTA export profits [23][25] Upstream PX and PTA Start - up - Display the operating loads of PTA and PX in China, South Korea, and Taiwan [26][29][31] Social Inventory and Warehouse Receipts - Show PTA's weekly social inventory, PX's monthly social inventory, and various warehouse receipt inventories [36][38][39] Downstream Polyester Load - Include long - filament and short - fiber sales, polyester load, and various factory inventory days and operating rates in the downstream [46][48][56] PF Detailed Data - Provide information on polyester staple fiber load, inventory days, and related production data [68][77][80] PR Fundamental Detailed Data - Include polyester bottle - chip load, inventory days, processing fees, and export profits [87][89][93]

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The market is affected by demand drag, and attention should be paid to the US - Iran peace talks. The EG load continues to decline, and the port starts to reduce inventory. The domestic supply of ethylene glycol decreases due to concerns about the stability of upstream raw material supply, and overseas supply is also at a low level. The demand side shows that polyester and weaving loads are difficult to further increase, and downstream acceptance of high - price raw materials is low. It is recommended to cautiously go long on hedging at low prices, as inventory reduction is expected to accelerate in March and April [1][2][3] 3. Summary According to Relevant Catalogs Price and Basis - Yesterday, the closing price of the EG main contract was 5,036 yuan/ton (a change of - 83 yuan/ton from the previous trading day, a decrease of 1.62%), the EG spot price in the East China market was 4,863 yuan/ton (a change of - 373 yuan/ton from the previous trading day, a decrease of 7.12%), and the EG East China spot basis was - 47 yuan/ton (a month - on - month increase of 8 yuan/ton) [1] Production Profit and Operating Rate - According to Longzhong data, the production gross profit of ethylene - based EG was - 283 US dollars/ton (a month - on - month decrease of 35 US dollars/ton), and the production gross profit of coal - based syngas - based EG was 526 yuan/ton (a month - on - month decrease of 252 yuan/ton) [1] International Price Difference - Not elaborated in the content other than the mention of the chart "Ethylene glycol international price difference: US FOB - China CFR" [18] Downstream Sales, Production, and Operating Rate - The polyester and weaving loads are difficult to further increase, the downstream acceptance of high - price raw materials is low, the voices of production reduction are increasing, the sales of filament have been continuously sluggish recently, the inventory of filament and staple fiber has rapidly accumulated, and the polyester load is lower than that of the same period last year. If the downstream does not replenish inventory continuously, the load may decline [2] Inventory Data - According to CCF data released every Monday, the inventory of MEG in the main ports of East China was 1.039 million tons (a month - on - month increase of 28,000 tons), and the main ports had a slight inventory increase last week. This week, the total planned arrival volume at the main ports in East China is 117,000 tons, and the arrival volume at the secondary ports is 10,000 tons, and the inventory is expected to remain stable [1]

Report Industry Investment Rating No relevant information provided. Core Viewpoints - The market focus is on the Iran situation, with rising crude oil prices due to the tense situation. The PXN has been significantly compressed, and the supply interruption in the Middle East has continuously pushed up the naphtha price. However, PX's upward momentum is limited by the poor downstream polyester demand. The impact of the Iran situation is gradually expanding, and the traffic volume in the Strait of Hormuz remains low. Under the concern of supply interruption, the PX spot shows a Back structure, and the floating price is relatively strong. Recently, affected by the concern about the stability of raw material supply, the PX load has decreased, and the de - stocking amplitude has increased. If the raw material supply continues to be affected, the impact on refineries in other countries will also continue to expand [1]. - For TA, the PTA spot basis is -75 yuan/ton (with a month - on - month change of -2 yuan/ton), the PTA spot processing fee is 337 yuan/ton (with a month - on - month change of +106 yuan/ton), and the processing fee of the main contract on the disk is 326 yuan/ton (with a month - on - month change of +7 yuan/ton). The weaving load and polyester load are recovering, and the PTA load has decreased but the impact is smaller than that of PX. It continued to accumulate inventory in March, but the PTA trend is relatively strong under cost support, and the processing fee is compressed. Currently, the supply is relatively abundant, and the spot basis is running weakly. The market is gambling on which has a greater impact, supply reduction or demand suppression. In the medium and long term, as the cycle of concentrated capacity release ends, the PTA processing fee is expected to gradually improve, and the long - term expectation is still good [2]. - In terms of demand, the polyester operating rate is 87.6% (with a month - on - month increase of 0.9%). The polyester and weaving loads are stable, but the downstream prices are sluggish in following the price increase, and the acceptance of high - priced raw materials is not high. There are more voices of production reduction. Recently, the sales of filament have been continuously sluggish, and the inventory of filament and staple fiber has rapidly accumulated. The polyester load is lower than that of last year. If the downstream continues not to replenish inventory, the load may decrease [2]. - For PF, the spot production profit is -54 yuan/ton (with a month - on - month increase of 213 yuan/ton). The downstream has a strong wait - and - see attitude, moderately replenishes at the phased low level, and the high - level transactions are few. The staple fiber factory equipment has been started, and the load has increased. Due to the weak sales, the factory inventory has increased, and the processing difference fluctuates greatly. Attention should be paid to the recovery of traffic in the Strait of Hormuz [3]. - For PR, the spot processing fee of bottle chips is 1108 yuan/ton (with a month - on - month change of +116 yuan/ton). Affected by the situation in the Middle East and the Strait of Hormuz, the upstream raw materials have experienced production reduction and load reduction phenomena, the prices of polyester raw materials have risen significantly, and the prices of polyester bottle chip factories mostly follow the increase. The operating load of polyester bottle chip equipment is stable and slightly increased, and the overall supply has increased slightly. However, the mainstream factories have cut part of the contract volume, and the circulating supply is still tight. The inventory of bottle chip factories remains at a low level, and the processing fee has retreated but is still relatively high [3]. - Strategy: For the unilateral strategy, it is advisable to cautiously go long on PX/PTA/PF/PR for hedging. Before seeing actual troop withdrawal or negotiation, the shipping in the Strait of Hormuz is still difficult to be smooth, and the cost support and supply concerns still exist, but there is a negative feedback expectation on the demand side. Currently, the trading is difficult, and it is not advisable to chase up or kill down. For the cross - variety strategy, there is no relevant suggestion. For the cross - period strategy, the supply affects the PX 5 - 9 positive spread, and attention should be paid to the traffic situation in the Strait of Hormuz [4]. Summary by Directory Price and Basis - Figures include TA main contract, basis, and inter - period spread trends; PX main contract trend, basis, and inter - period spread; PTA East China spot basis; and short - fiber 1.56D*38mm semi - bright natural white basis [8][9][14] Upstream Profits and Spreads - Figures cover PX processing fee PXN (PX China CFR - Naphtha Japan CFR), PTA spot processing fee, South Korean xylene isomerization profit, and South Korean STDP selective disproportionation profit [16][19] International Spreads and Import - Export Profits - Figures involve toluene US - Asia spread (FOB US Gulf - FOB South Korea), toluene South Korea FOB - Japan Naphtha CFR, and PTA export profit [24][26] Upstream PX and PTA Start - up - Figures show China's PTA load, South Korea's PTA load, Taiwan's PTA load, China's PX load, and Asia's PX load [27][30][32] Social Inventory and Warehouse Receipts - Figures include PTA weekly social inventory, PX monthly social inventory, PTA total warehouse receipts + forecast volume, PTA warehouse warehouse receipt inventory, PX warehouse receipt inventory, and PF warehouse receipt inventory [37][39][40] Downstream Polyester Load - Figures cover filament sales, staple fiber sales, polyester load, direct - spinning filament load, polyester staple fiber load, polyester bottle chip load, filament DTY factory inventory days, filament FDY factory inventory days, filament POY factory inventory days, Jiangsu and Zhejiang loom operating rate, Jiangsu and Zhejiang texturing machine operating rate, and Jiangsu and Zhejiang printing and dyeing operating rate [47][49][57] PF Detailed Data - Figures involve polyester staple fiber load, polyester staple fiber factory equity inventory days, 1.4D physical inventory, 1.4D equity inventory, recycled cotton - type staple fiber load, raw - recycled spread (1.4D polyester staple - 1.4D imitation large - chemical fiber), pure polyester yarn operating rate, pure polyester yarn production profit, polyester - cotton yarn operating rate, polyester - cotton yarn processing fee, pure polyester yarn factory inventory available days, and polyester - cotton yarn factory inventory available days [69][78][81] PR Fundamental Detailed Data - Figures include polyester bottle chip load, bottle chip factory bottle chip 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, bottle chip next - month spread (next month - base month), and bottle chip next - next - month spread (next - next month - base month) [89][93][95]

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints - The main contract of EG closed at 5,220 yuan/ton, up 371 yuan/ton or 7.65% from the previous trading day. The spot price in the East China market was 5,154 yuan/ton, up 354 yuan/ton or 7.38%. The spot basis in East China was -71 yuan/ton, up 7 yuan/ton month-on-month. The EG load continued to decline, and the port started to destock [1]. - On March 19, the main contract of MEG rose 6.97%, and olefin-based chemicals as a whole moved up due to the further tense situation in Iran. The attack on Iranian natural gas facilities and subsequent retaliatory strikes led to a sharp increase in the prices of crude oil and LPG, further boosting the strength of olefin-based chemicals. The restart of several Iranian EG plants is also uncertain [1]. - The production profit of ethylene-based EG was -$238/ton, down $6/ton month-on-month, while that of coal-based syngas EG was 138 yuan/ton, up 60 yuan/ton month-on-month [1]. - The inventory at the main ports in East China was 1.011 million tons, down 57,000 tons month-on-month. The planned arrivals at the main ports this week are expected to keep the inventory stable with a slight increase [2]. - On the supply side, the domestic ethylene glycol load decreased due to concerns about the stability of upstream raw material supply, and imports are expected to further shrink under the influence of the Iranian situation. On the demand side, the polyester and weaving loads are recovering, but the downstream prices are showing signs of weakness, and the inventory of filaments and staple fibers has begun to accumulate. Attention should be paid to the possible negative feedback on the downstream if the cost remains high [2]. - The recommended strategy is to cautiously buy on dips for hedging. The fundamentals are improving marginally under high inventory, and destocking is expected to increase in April. Short-term attention should be paid to the passage of the Strait of Hormuz and changes in ethylene glycol plants [3]. 3. Summary by Directory Price and Basis - The main contract of EG closed at 5,220 yuan/ton, up 371 yuan/ton or 7.65% from the previous trading day. The spot price in the East China market was 5,154 yuan/ton, up 354 yuan/ton or 7.38%. The spot basis in East China was -71 yuan/ton, up 7 yuan/ton month-on-month [1]. Production Profit and Operating Rate - The production profit of ethylene-based EG was -$238/ton, down $6/ton month-on-month, while that of coal-based syngas EG was 138 yuan/ton, up 60 yuan/ton month-on-month [1]. International Price Difference - No specific data or analysis provided Downstream Sales and Operating Rate - The polyester and weaving loads are recovering, but the downstream prices are showing signs of weakness, and the inventory of filaments and staple fibers has begun to accumulate [2]. Inventory Data - The inventory at the main ports in East China was 1.011 million tons, down 57,000 tons month-on-month. The planned arrivals at the main ports this week are 139,000 tons, and the arrivals at the secondary ports are 18,000 tons, so the inventory is expected to remain stable with a slight increase [2].

Summary of Conference Call Notes Company and Industry Overview - The conference call discusses the performance and outlook of the polyester industry, specifically focusing on the company Xin Feng Ming and its operations in the PTA (Purified Terephthalic Acid) and polyester filament sectors [2][3][23]. Key Points and Arguments Industry Confirmation and Pricing Dynamics - The industry has confirmed its bottom, with PTA and filament price differentials entering a recovery phase, expected to complete inventory destocking by the end of March and initiate a price increase cycle [2][3]. - Short fiber business is performing better than long filament, leveraging a "one-price" model and holding the largest domestic market share, with an expected unit price differential of approximately 150-200 RMB by 2025 [2][14]. Capacity Expansion Plans - Clear capacity expansion plans for 2026 include an increase of 600,000 tons in short fibers (scheduled for June and October) and 300,000 tons in long filaments (planned for October) [2][9]. - The company is planning a 600,000-ton capacity in Egypt, with the first unit expected to start construction after obtaining ODI approval around May-June 2026 [2][19]. Product Differentiation and Pricing Strategy - Over 50% of the company's products are differentiated (including fine specifications), with specialty fibers accounting for about 10%. Some products are priced 20-50 RMB/ton higher than competitors [2][17]. - The operational strategy aims for a stable balance point at a price differential of 300 RMB/ton, maintaining profitability in low differential ranges due to cost advantages [2][5]. Market Conditions and Inventory Management - As of early 2026, the industry has reduced long filament production by approximately 15%. If inventory levels rise significantly, reductions could increase to 25%, but current conditions do not necessitate further cuts [4][20]. - The company currently holds about 10-15 days of raw material inventory, with plans to consume the inventory built up during the Spring Festival by late March or early April [3][10]. PTA and Long Filament Price Differential - The price differential between long filaments and PTA is expected to improve compared to 2025, with potential fluctuations between 500-800 RMB/ton depending on export and overseas demand [5][6]. - The company anticipates a favorable price differential around 300 RMB/ton, which would enhance profitability, especially for larger producers [5][6]. Strategic Investments and New Materials - The company has invested in a 7% stake in Lif, focusing on biobased new materials, with plans to launch a 10,000-ton production line by the end of 2026 [11][12]. - The chemical recycling business is in the early stages, with progress made but no substantial milestones disclosed yet [12]. Export and Market Expansion - The current export ratio for PTA is about 10%, with plans to increase this post the fourth phase of production. The company aims to maintain a balance between domestic and export markets [10][21]. - Key regions for overseas market expansion include the Middle East, Southeast Asia, and South America, with a focus on localized sales in Africa through the Egypt project [22]. Future Outlook - The company expects a recovery in the polyester market, with inventory levels supporting a rebound in production and sales. The demand outlook remains positive, driven by low inventory levels and improved market conditions [20][23]. - The overall industry is viewed as entering a recovery phase, with the company positioned for stable growth due to its low-cost structure and clear development path [23].

Summary of Key Points from Conference Call Records Industry Overview - The conference call discusses the **non-ferrous metal resources** industry, highlighting the impact of geopolitical disturbances and reduced investment willingness from Chinese companies on global supply rigidity, which has driven up metal prices due to improved global supply-demand relationships [1][2]. Core Insights and Arguments Non-Ferrous Metals - The **non-ferrous metals sector**, including gold, silver, copper, tungsten, and rare earths, is expected to perform strongly in 2025, with a notable characteristic being the lack of new supply despite high prices, primarily due to geopolitical disturbances [2]. - The **electric power sector** is recommended for investment due to China's competitive electricity prices, low overall industry costs, and strong profitability of power companies [1][7]. Chemical Industry - The **chemical industry** is projected to hit a bottom in the second half of 2025, with supply-demand changes expected to bring price elasticity. The industry is moving towards high-end upgrades due to strong low-price rights [1][9]. Specific Markets - The **chromium salt market** is expected to grow due to strategic demand in civil and military aviation, with supply constraints leading to a gradual increase in prices [1][11]. - The **sulfur market** is experiencing price increases due to reduced oil and gas recovery affecting supply, while demand for battery-grade nickel sulfate is rising [1][12]. Investment Opportunities - Strategic resources to focus on include: - **Electrolytic aluminum** and smelting sectors where China holds advantages. - **Civil aviation, gas turbines, chips, and high-end medical devices** where the U.S. and other countries have technological advantages [1][4]. - Recommended stocks include: - **Refrigerants**: Juhua Co., Sanmei Co. - **Chromium salts**: Zhenhua Co. - **Sulfur**: Yuegui Co. [1][13]. Additional Insights - The **power sector** is highlighted for its ability to maintain profitability despite high import dependency for raw materials, with a significant portion of aluminum exports going to Europe and the U.S. [1][7]. - The **chemical industry** is expected to see significant growth in specific segments like refrigerants and chromium salts due to environmental policies and supply constraints [1][9][10]. - The **aviation industry** faces significant supply constraints due to limited production capacity from Boeing and Airbus, with delivery cycles extending to 5-6 years [2][24]. Future Trends - The **oil and gas sector** is expected to see improvements starting from late 2025, driven by OPEC's production changes and increased demand for compliant tankers [2][31]. - The **aviation sector** is projected to experience a strong demand increase from foreign tourism, significantly impacting local consumption and overall industry growth [2][25][28]. Conclusion - The conference call emphasizes the importance of strategic resource allocation in sectors like non-ferrous metals, chemicals, and aviation, while also highlighting the potential for significant price increases in constrained supply environments. The insights provided suggest a cautious yet optimistic outlook for investors focusing on these industries.

1. Report Industry Investment Rating No information provided in the given content. 2. Core Viewpoints of the Report - Cost side: Recently, it has been fluctuating around the Iran situation. On Monday, crude oil prices dropped significantly, with the geopolitical premium being reversed. Brent oil prices fell from around $70 per barrel at the end of last month to around $65 - $66 per barrel. There are signs of a cooling of geopolitical risks [1]. - PX: The PXN was $310 per ton in the previous trading session (a month - on - month change of -$6.88 per ton). The short - term fundamentals are weak, but the medium - term outlook is good. Attention should be paid to PX maintenance and import conditions [1]. - TA: The spot basis of the TA main contract is -68 yuan/ton (a month - on - month change of +3 yuan/ton), the PTA spot processing fee is 376 yuan/ton (a month - on - month change of -48 yuan/ton), and the processing fee on the main contract's disk is 423 yuan/ton (a month - on - month change of +21 yuan/ton). In the long - term, as the cycle of concentrated capacity release ends, the PTA processing fee is expected to gradually improve [2]. - Demand: The polyester operating rate is 84.2% (a month - on - month decrease of 2.0%). The weaving load has been accelerating its decline, and downstream enterprises will start to have concentrated holidays around the end of January. Polyester load is accelerating its decline, and the Spring Festival maintenance plans are being gradually implemented [2]. - PF: The spot production profit is 37 yuan/ton (a month - on - month increase of 41 yuan/ton). Demand is weak before the Spring Festival, and the load is gradually declining [2]. - PR: The spot processing fee for bottle chips is 619 yuan/ton (a month - on - month change of +35 yuan/ton). The Spring Festival maintenance plans of polyester bottle chip factories are being gradually implemented, inventory reduction before the Spring Festival is smooth, and the processing fee for polyester bottle chips has rebounded [2]. - Strategy: For PX/PTA/PF/PR, it is recommended to hold a light position and wait and see in the short term and go long on dips for hedging in the long term [3]. 3. Summary According to the Catalog Price and Basis - Figures include 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 - bright natural white basis [8][9][11] Upstream Profits and Spreads - Figures cover PX processing fee PXN, PTA spot processing fee, South Korean xylene isomerization profit, and South Korean STDP selective disproportionation profit [17][21] International Spreads and Import - Export Profits - Figures involve toluene US - Asia spread, toluene South Korean FOB - Japanese naphtha CFR, and PTA export profit [23][25] Upstream PX and PTA Start - up - Figures show China's PTA load, South Korea's PTA load, Taiwan's PTA load, China's PX load, and Asia's PX load [26][29][31] Social Inventory and Warehouse Receipts - Figures include PTA weekly social inventory, PX monthly social inventory, PTA total warehouse receipts + forecast volume, PTA warehouse warehouse receipt inventory, PX warehouse receipt inventory, and PF warehouse receipt inventory [36][39][40] Downstream Polyester Load - Figures cover filament production and sales, short - fiber production and sales, polyester load, direct - spinning filament load, polyester staple fiber load, polyester bottle chip load, filament DTY factory inventory days, filament FDY factory inventory days, filament POY factory inventory days, Jiangsu and Zhejiang loom operating rate, Jiangsu and Zhejiang texturing machine operating rate, and Jiangsu and Zhejiang printing and dyeing operating rate [46][48][56] PF Detailed Data - Figures include 1.4D physical inventory, 1.4D equity inventory, polyester staple fiber load, polyester staple fiber factory equity inventory days, recycled cotton - type staple fiber load, original - recycled spread, pure polyester yarn operating rate, pure polyester yarn production profit, polyester - cotton yarn operating rate, polyester - cotton yarn processing fee, pure polyester yarn factory in - house inventory available days, and polyester - cotton yarn factory in - house inventory available days [71][76][84] PR Fundamental Detailed Data - Figures involve polyester bottle chip load, bottle chip factory bottle chip inventory days, bottle chip spot processing fee, bottle chip export processing fee, bottle chip export profit, East China water bottle chips - recycled 3A - grade white bottle chips, bottle chip next - month spread, and bottle chip next - next - month spread [88][90][96]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoint of the Report - The valuation of polyester products has increased compared to 2025, but the current production capacity base is still large. In 2026, the growth rate of PTA downstream polyester production capacity will slow down, and the profits of the polyester industry chain are mainly distributed upstream. The market is sensitive to the supply changes of ethylene glycol at low prices, and the cost of oil can support the upward trend of the polyester sector in the short term. Without geopolitical catalysts, the upward space of the aromatic hydrocarbon sector is limited. The demand side has limited driving effect on the price of the polyester sector before the Spring Festival [4][68]. 3. Summary According to the Directory 3.1 Fundamental Situation 3.1.1 Aromatic Hydrocarbon Sector Strengthens, PX and TA Increase Positions and Rise in the Second Half of the Month - In late January, PX and TA futures increased positions and rose, and the valuation rebounded after a period of shock adjustment. The core factor for the new high of polyester raw materials in the off - season is that the investment cycle of TA has ended, and the market begins to trade the logic that the period of loose supply is coming to an end. In 2025, new PTA production capacity totaled 8.7 million tons, and the PTA production capacity in mainland China has been adjusted to 92.09 million tons. PTA will have a production vacuum period in 2026. There has been no new PX production capacity from 2023 - 2025, and there will be little new PX production capacity in 2026, mainly concentrated in the second half of the year. The growth rate of downstream polyester production capacity continues to slow down, with an expected new production capacity of 3.76 million tons in 2026 and a production capacity growth rate of 4.17% [3][9]. - The crude oil market has entered a stage of game between geopolitical risks and supply - demand fundamentals. OPEC+ maintains its production policy, and the political situation in Venezuela has changed. The market is more concerned about the potential supply risk interruptions of major oil - producing countries such as Russia and Iran. PX was under pressure in the first half of the month, and the spot market and paper - cargo structure performed poorly. The PX 3 - 5 month spread weakened, and the basis of TA also remained weak [14][15]. - In January, the economic benefits of PX plants were good, with PXN maintaining above $340/ton and the PX - MX spread between $160 - 180/ton. High benefits drove the return of supply, and PX plants at home and abroad increased their loads. The average monthly operating rate of PX in January was 90.9%, a month - on - month increase of 2.7% and a year - on - year increase of 5%. As of January 29, the operating rate of Asian PX was 81.6%, also at a high level over the years [21]. - Some PTA plants had equipment start - up and shutdown operations. The average monthly operating rate of PTA in January was 77.39%, a month - on - month increase of 3.9% and a year - on - year decrease of 2.33%. The TA processing margin rebounded to a relatively high level, and is currently around 450 yuan/ton [22]. 3.1.2 Ethylene Glycol Rebounds from a Low Level, Sensitive to Supply Changes at Low Prices - As of the 26th, the inventory of MEG in some main ports in East China was about 858,000 tons, and ethylene glycol had a significant inventory build - up in January. The market is sensitive to the supply changes of ethylene glycol at low prices. The lower boundary of ethylene glycol is around 3,700 yuan based on the marginal cost of coal - based plants. A 900,000 - ton/year ethylene glycol plant of Satellite Petrochemical plans to stop production and switch to PE production in mid - February. The planned ethylene glycol plants in 2026, such as Zhongsha Gulei and Huajin Aramco, are all scheduled to be put into operation in the second half of the year [35]. - The average monthly total load of ethylene glycol in January was 73.99%, a month - on - month increase of 1.76% and a year - on - year increase of 2.31%. The average monthly load of synthetic - gas - based ethylene glycol was 79.12%, a month - on - month increase of 4.96% and a year - on - year increase of 6.88%. Some overseas ethylene glycol plants had maintenance or shutdown operations. The import volume of ethylene glycol will decline to around 600,000 tons in March, and the inventory build - up expectation still exists, with insufficient upward driving force in the spot market [36]. 3.1.3 As the Spring Festival Approaches, More Polyester Plants Undergo Maintenance and Shutdown, and the Operating Rate of Terminals in Jiangsu and Zhejiang Decreases - As the Spring Festival approaches, the polyester load decreases, and most polyester plants have announced Spring Festival maintenance plans. The export orders of terminal textiles and clothing are average, and the inventory of grey cloth before the Spring Festival is high. The market is optimistic about the traditional peak season after the festival. The demand for polyester staple fiber from downstream draw - texturing and weaving enterprises decreases, and the inventory of staple fiber decreases rapidly. The inventory of filament production enterprises is controllable, and the market supply pressure is relatively small. After the maintenance of polyester bottle chips, the efficiency has improved significantly, and the inventory is also decreasing [49]. - In the process of the rise of polyester raw materials, the processing margin of bottle chips has expanded, the processing margin of staple fiber is basically maintained between 900 - 1,000 yuan/ton, and the processing margin of filament has changed little [49]. 3.1.4 Impact of Naphtha Consumption Tax on the Chemical Supply - Side - In 2026, there are news that the consumption tax on naphtha will be fully levied in the circulation link, changing from "direct supply at fixed points and direct exemption" to "levy first and then refund". The consumption tax needs to be prepaid by petrochemical plants in the procurement link, with a tax amount of 2,105 yuan per ton, and the subsequent tax - refund process may take several months. This will squeeze the production cost and profit space of petrochemical plants and increase the cost of ethylene, aromatic hydrocarbons and their derivatives [64]. - This policy aims to eliminate small and medium - sized production capacities with old equipment, backward technology and fragile capital chains, and guide the industry towards large - scale integrated refining and chemical projects. In the long run, the industry concentration will increase, and the industrial pattern will evolve towards large - scale, intensive and high - end directions [66]. 3.2 Market Outlook and Strategy Recommendation 3.2.1 Market Outlook - The valuation of the polyester sector has increased compared to 2025, but the production capacity base is still large. The growth rate of PTA downstream polyester production capacity will slow down in 2026, and the profits of the polyester industry chain are mainly distributed upstream. The market is sensitive to the supply changes of ethylene glycol at low prices, and the cost of oil can support the upward trend of the polyester sector in the short term. Without geopolitical catalysts, the upward space of the aromatic hydrocarbon sector is limited. The demand side has limited driving effect on the price of the polyester sector before the Spring Festival [4][68]. 3.2.2 Strategy Recommendation - Unilateral: Go long on PX and TA at low prices after the bullish sentiment cools down and corrects. Without the cooperation of cost - side crude oil driving, the upward driving force is not strong. Ethylene glycol maintains a wide - range shock, and pay attention to the switch between the market's trading of supply - surplus inventory build - up expectation and the rebound sentiment of the chemical sector [6][68]. - Arbitrage: Go long on PX and TA and short ethylene glycol. Pay attention to the positive - spread opportunity of ethylene glycol and shrink the TA processing margin at high prices [6][68]. - Options: Wait and see [6][68].

Group 1 - The core viewpoint of the article is that the chemical sector may undergo a revaluation due to clearer supply-side policy guidance and a mismatch between the current operational status and market position of China's chemical industry, indicating a high probability of future recovery [1] - The market may be underestimating the impact of liquidity on the sector, as the chemical industry is one of the few sectors that is at the bottom of the cycle, has an upward trend in fundamentals, and offers attractive valuations [1] - The China Petroleum and Chemical Industry Index includes major players such as "Three Oil Giants," Wanhua Chemical, and Hengli Petrochemical, which are expected to benefit significantly from the cyclical recovery of the sector [1]

Supply and Demand - As of January 15, PTA operating rate is at 76.9%, down by 1.3% due to the restart of 3 million tons of production in Dushan and the shutdown of 3.6 million tons of new material facilities [3] - The overall polyester operating rate has decreased to 89.9%, down by 0.9%, with specific adjustments in terminal operating rates: texturing at 70% (down by 2%), weaving at 55% (down by 1%), and dyeing at 70% (up by 1%) [3] - There is a mixed sentiment in the market regarding raw material procurement, with some customers planning to stock up before the New Year while others intend to halt production after depleting their raw materials [3] Profitability - As of January 15, PTA spot processing fee is around 390 RMB/ton, while the processing fees for TA2603 and TA2605 are 356 RMB/ton and 340 RMB/ton respectively [2] Market Outlook - This week, PTA facilities are experiencing both restarts and maintenance, leading to a decrease in overall operating rates; downstream polyester is expected to reduce production due to seasonal factors around the Spring Festival [4] - Major polyester manufacturers have decided to initiate a continuous production cut of 15% starting January 14, which is expected to impact market dynamics [4] - The supply-demand outlook for PTA is gradually weakening, with limited inventory accumulation expected in January but significant pressure anticipated in February [4]