Multiple PTA units are scheduled for maintenance, with a significant volume of capacity expected to be offline in May and June. This, combined with optimistic export forecasts, is projected to reduce inventories and support an increase in the spot basis differential.

Currently, the spot basis lacks strong upward momentum despite ongoing unit turnarounds, primarily due to ample PTA supply. High inventory levels accumulated earlier in the year continue to pressure the market. As of May 8th, PTA warehouse stocks remained at 1 million tons.

The outlook for May and June is more positive. Planned maintenance is extensive, with approximately 22.8 million tons of PTA capacity scheduled for outages. This is expected to reduce monthly production to between 5.85 and 6.00 million tons, a significant drop below the 2025 monthly average of 6.12 million tons. Concurrently, PTA exports, particularly to India, are forecast to be robust in the second quarter. India's zero-tariff policy on certain chemical imports from April 2 to June 30, 2026, is expected to boost demand for Chinese PTA. Quarterly exports are projected to average 360,000 tons per month, an increase of 55,000 tons from the first-quarter average, aiding inventory drawdowns.

A key downside risk is weaker-than-usual operating rates in the downstream polyester sector. Polyester plant utilization has been lower year-on-year, and further production cuts are possible in May and June due to high finished product inventories and lackluster procurement from textile mills. This could slow the pace of PTA destocking.

In summary, despite soft downstream demand, the substantial volume of PTA unit maintenance and strong export expectations are anticipated to lead to continued inventory reductions in May and June. The PTA spot basis is forecast to rise by 50-100 yuan/ton, which should improve trading sentiment in the physical market.