June PTA output of China was about 2,830 KT, down 86 KT month on month. With import volume expected to be 45 KT, China PTA supply may increase by 2,875 KT. As for demand, the output of polyester products totaled about 3,160kt, consuming 2,718kt of PTA, plus 80kt of PTA consumed in other applications as well as 100kt of PTA exports, PTA demand totaled about 2,900kt. Thus, PTA social inventory may decrease by about 20-30 KT.

As to supply side, few PTA plants have turnaround plans for July. Jialong put its 600kta PTA unit under maintenance while Hanbang, Mitsubishi and Urumqi plan to restart their units. With Jul PX ACP settled at $800/mt, PTA margins recovered and if Yisheng postpone or cancel the turnaround plan of the 2.25 million unit, PTA output of July may reach up to 2.9-2.95 million tons. If Yisheng sticks to the plan, PTA output shall be around 2.8-2.85 million tons.

As to the demand side, polyester operating rate is at 82 per cent at the beginning of July. Based on concerns of G20 regulation and firm crude oil market, plants kept steady operations. Assume average polyester operating rate at 80%, PTA inventory may increase somewhat.

Judging by latest data, total inventory in warehouse, port and plants remained stable. Warehouse inventory stayed high but plant inventory was at a medium-to-low level except for a few ample-supply plants.