Citic Securities Futures: Domestic PX Equipment Reduces Operations, Supply and Demand Both Decline

Supply and demand both decrease. Due to concerns over the stability of upstream raw material supplies, some domestic PX plants have taken preventive reduction measures. China’s PX industry operating rate decreased by 5.8 percentage points month-on-month to 84.6%, while the Asian industry operating rate decreased by 6.3 percentage points to 76.9%. These levels are still relatively high historically. Attention is on domestic refineries’ efforts to “maintain oil output and reduce chemical production.” On the demand side, as PTA plants that were previously under maintenance are gradually restarting as planned, production in April is expected to increase significantly. The fundamentals of PX remain relatively strong within the industry chain. With the start of PX plant maintenance season, inventory is expected to shift from accumulation to depletion starting in March. The U.S. military launched a fierce airstrike on Iran’s oil export hub, Kharg Island, claiming to have targeted over 90 military objectives. On Monday morning, oil prices opened high but declined throughout the day. Given that the Strait of Hormuz remains closed, U.S. Secretary of Defense has agreed to deploy Marine expeditionary forces to the Middle East, making oil prices more prone to rise than fall. Due to logistics disruptions and refinery reductions, the domestic chemical market is beginning to face a real supply gap. (CITIC Construction Investment Futures)