Starting in April, PTA plants underwent intensive maintenance, leading to a continuous destocking period from April to August. By August, the estimated social inventory of PTA had fallen to its lowest point in 44 months. However, with the PTA operating rate expected to climb gradually in September, there are concerns that the downstream demand during the peak season may underperform, potentially shifting the supply-demand balance toward inventory accumulation.

The five-month streak of destocking has brought the estimated social inventory of PTA in August to a near 44-month low, with spot basis levels repeatedly hitting yearly highs by mid-August. The intensive maintenance that began in April marked the start of this inventory drawdown. In August, the PTA operating rate hit its lowest level since 2014, driven by a combination of factors including annual overhauls, insufficient PX supply, equipment malfunctions, and typhoon-related logistics disruptions. Notably, the repeated delays in restarting two PTA plants in East China in mid-August led to significant supply shortages in northern Jiangsu, with the estimated monthly output for August likely setting a 41-month low. By August 19, the highest spot basis transaction was a premium of 355 yuan per ton over the TA2609 futures contract. Major PTA suppliers have been slow with deliveries, while holders have actively pushed prices higher. Some buyers, securing supply, chased the high spot basis, while others remained cautious.

Looking ahead, September is expected to see a slight inventory buildup. PTA plants are set to restart gradually, while the demand peak season may not live up to expectations, with limited prospects for a rebound in downstream polyester operating rates. As a result, the social inventory could edge up from its near 44-month low.

On the supply side, after the record-scale maintenance and production cuts from April to August, PTA plants will gradually resume operations. With few announced maintenance plans and an increase in PX supply supporting production recovery, September's monthly output is projected to rise notably. Before the end of August, four PTA plants with a combined capacity of 11.9 million tons are scheduled to restart, with no new maintenance plans added. In September, two plants totaling 4.3 million tons are set to restart, and a 2.5 million-ton plant may undergo maintenance at the end of the month, though the specific schedule is undecided. Two other East China plants that were previously shut down have no confirmed restart dates; if they remain idle for the entire month, the projected output for September is estimated at 5.95 million tons. Based on September's PX production and imports totaling 3.8 million tons, the theoretical PTA output would be 5.82 million tons (using the industry's 0.653 usage ratio). Factoring in potential unplanned short-term stoppages, the overall output estimate for September is around 5.9 million tons, an increase of approximately 930,000 tons from August.

On the demand side, September has one fewer natural day than August, and there are worries that the polyester demand peak season may not materialize, limiting the recovery in polyester operating rates and offering little room for growth in PTA consumption. First, the peak season for polyester bottle chips has ended; a 600,000-ton bottle chip plant halted operations on August 19 due to a malfunction, and five bottle chip plants totaling 2.85 million tons are scheduled for maintenance in September, which will significantly reduce PTA demand from this sector. Second, the polyester filament industry is expected to maintain production cuts to protect profits; as of August 18, among the four major polyester products, only POY filament was profitable in terms of August average margins. With a focus on profitability, filament plants are unlikely to raise operating rates, removing the key driver for an overall increase in polyester operating rates. Third, polyester staple fiber demand is weak, with halted plants not expected to restart soon; some plants are considering production cuts but have not announced specifics. Additionally, a new 1.25 million-ton PTA capacity in India may begin trial runs at the end of August. If successful, it would boost India's PTA supply, potentially blocking Chinese exports to India, with no other country or region ready to substitute that market in the short term.

In summary, the PTA operating rate will move away from its historical low range in September, and the supply-demand balance is likely to shift toward a slight inventory buildup. The spot basis is expected to decline significantly, reducing traders' enthusiasm for operations, though this would benefit downstream polyester plants in their purchasing.