Cost factors remain centered on the Iranian situation, with geopolitical tensions driving a rebound in crude oil prices. However, the underlying fundamentals for crude oil itself remain weak. Market participants should monitor developments in Iran; any easing of tensions could trigger a corrective decline in oil prices.

Regarding PX, the PXN spread stood at $313 per ton on the previous trading day, a decrease of $6.50 per ton from the prior session. Recent fluctuations in the PX floating price have been minimal. Supported by sustained favorable margins, the operating rate for PX in Asia has continued to climb, reaching its highest level since late February 2019. Additionally, arbitrage opportunities between domestic and international markets may lead to increased imports. Meanwhile, downstream polyester production was curtailed during the Spring Festival holiday, indicating weak current fundamentals. Nevertheless, medium-term expectations remain positive, with attention focused on the materialization of scheduled PX plant maintenance in March.

For PTA, the spot basis was quoted at -63 yuan per ton, unchanged from the previous period. The spot processing margin was 407 yuan per ton, down by 50 yuan per ton. The processing margin for the main futures contract was 417 yuan per ton, a decrease of 19 yuan per ton. Fundamentals showed little change during the holiday period. With downstream polyester operations reduced, the supply-demand balance weakened compared to the previous period, leading to inventory accumulation for PTA. A destocking trend is anticipated from March onward, driven by planned PTA plant maintenance and a recovery in demand. In the medium to long term, following the conclusion of the concentrated capacity expansion cycle, PTA processing margins are expected to gradually improve, sustaining a positive outlook.

On the demand side, the polyester operating rate was 77.6%, down 0.6 percentage points from the prior period. Downstream operations were largely halted for the Spring Festival, with weaving load factors dropping to zero. Polyester operating rates also fell to low levels, resulting in inventory build-up. Most factories plan to resume sales and shipments around February 23-24, with a smaller number restarting on February 21. The pace of the post-holiday demand recovery will be a key focus.

For PF, the spot production margin was 49 yuan per ton, an increase of 33 yuan per ton. Many downstream facilities entered shutdowns around the holiday, with operating rates falling below 70%. This led to increased inventory at PF plants, and the post-holiday recovery will be monitored closely.

Regarding PR, the spot processing margin for bottle chips was 594 yuan per ton, up 31 yuan per ton. PR plants maintained low inventory levels ahead of the holiday. Given the generally low equity inventory at most facilities, prices for polyester bottle chips are expected to remain firm with a tendency toward strength after the new year. The spot market is anticipated to stay relatively tight, supporting processing margins at relatively high levels.

Strategy Single Position: Neutral short-term outlook for PX/PTA/PF/PR, cautiously optimistic medium-term. Monitor the outcome of US-Iran negotiations for potential impact on crude oil prices. Cross-Commodity: None Inter-Temporal: None

Risks Significant volatility in crude oil and gasoline prices; macroeconomic policy surprises exceeding expectations; unforeseen changes in geopolitical conflicts.