Shouchuang Futures: Cost increases combined with declining start-up rates, PX futures prices remain relatively strong.

The spot market: On April 6, CFR China PX was priced at $1,280 per metric ton, up $32 per metric ton from the previous trading day. On the cost side, the U.S. and Iran reportedly received a 45-day ceasefire agreement, but Iran responded firmly, with 10 demands. The market believes the likelihood of reaching some part of an agreement within the next 48 hours is low. The U.S. said that if a deal cannot be reached by the deadline, it will carry out further military strikes. International crude oil prices remain elevated. On the supply side, Saudi Jubail Industrial City was hit by an attack, which may affect PX units at the park. The park has PX capacity of 2.2 million metric tons, accounting for 49% of Saudi Arabia’s total PX capacity. Domestically, Jinling Petrochemical’s 700,000-ton PX unit is planned to undergo maintenance starting in mid-April for 55 days; Qingdao LIDONG’s 1.0 million-ton unit has a shutdown scheduled from late March to early May for maintenance; CNOOC Huizhou’s 2.45 million-ton unit may have a reduced load in April; Guangdong Petrochemical’s load declines in early April; and in South Korea, JX’s 1.0 million-ton unit shuts down in early April, with restart timing pending. Last week, both Asian and domestic PX operating rates continued to fall. As major shipping routes remain closed and crude supply stays disrupted, there is still room for further downside in PX operating rates later on, and some PX suppliers have reduced the supply of contracted cargoes. On the demand side, the impact from the upstream gradually spreads to downstream users, with PTA maintenance plans being increased. Meanwhile, negative feedback from end markets has become evident, and polyester and textile production operating rates have both continued to decline. In short, although demand at the margin is weakening, the geopolitical situation remains tense and crude oil prices stay firm. A strike on a major Saudi petrochemical industrial park may lead to further reductions in PX operating rates. It is expected that in the short term, PX futures prices will maintain a relatively strong pattern. Keep an eye on developments in the geopolitical situation, the crude oil price trend, and changes in upstream and downstream units. (Capital Futures)