Guangfa Futures: PX cost support is relatively strong, short-term high-level operation

Transit through the Strait of Hormuz remains restricted. Asian PX plants are still facing pressure from insufficient raw material supply. PX plants are expected to see increased production cuts and more turnaround maintenance shutdowns, and PX supply is expected to contract noticeably, which provides some support for PX. However, the number of unplanned maintenance events at downstream PTA plants is increasing, and Hengli, Sanfangxiang, and Tongkun have successively announced unplanned maintenance plans for their PTA units. With both PX supply and demand weak, although overall supply-and-demand expectations still remain tight, the pace of inventory build-up has decreased versus expectations, which means PX’s upside is under pressure. Attention should be paid to the geopolitical situation in the Middle East and to the operating rates of petrochemical plants. Strategically, low-level short-term longs should be taken. (GF Futures)