CITIC Wealth Futures: Polyester Industry Chain Price Revaluation, PTA May Face a Situation of Having Quotations Without Market

With the Strait of Hormuz blockade lasting for half a month, the raw material shortage crisis has significantly increased costs, and geopolitical tensions are driving the polyester industry chain to reassess prices from top to bottom. The Middle East conflict has greatly impacted the operating rates of Asian refineries, causing notable shocks to domestic PX and PTA markets, with a strong expectation of reduced capacity in future plants. As costs pass down to polyester and weaving companies, which are closer to end consumers, they will face dual pressures from high costs and weak demand. Although polyester products are following raw material price increases, transactions become increasingly difficult downstream, and end-users have limited capacity to accept high prices. If processing profits are squeezed to a certain extent, the blocked cost transmission will force downstream producers to cut production, creating a negative feedback loop for high-priced raw materials. We believe that if the US-Iran conflict is not eased or even worsens, PTA may face a situation of high prices but low market activity. (CICC Wealth Futures)