Refining, polyester, organosilicon, fine chemicals, robotics, and commercial spaceflight: New Materials Updates

A: Supply-demand dynamics for polyester filament have significantly improved. Although PTA faces substantial supply pressure, increased maintenance shutdowns recently have driven its processing margin into profitability; meanwhile, polyester filament’s profitability remains at a high level. Pre-Labor Day holiday (May 1st) restocking by downstream players has reduced POY inventory from 25 days to approximately 20 days. PX and PTA operating rates have declined to low levels. Due to oil price volatility in the first half of the year, downstream sectors—including yarn, grey fabric, and finished apparel—have maintained insufficient inventory levels. Terminal demand is thus expected to commence earlier, starting in late May, with a clear recovery anticipated in June and the critical restocking period for autumn/winter apparel occurring in July–August. Currently, the polyester filament processing margin stands at approximately RMB 1,500/ton, while the PTA processing margin is around RMB 450/ton. Industry-wide operating rates range between 75% and 80%, with large-scale producers nearing 80% and smaller producers operating at only 40%–50%. Smaller producers may face forced load reductions due to raw material supply constraints. Coupled with the anticipated demand recovery, this supply contraction and demand rebound will jointly reinforce the polyester filament processing margin cycle.

Q: What investment opportunities in the electronic materials sector are brought about by the global demand for computing power and the prosperity of the storage sector?

A: Overseas tech giants such as SK Hynix and Micron continue to exceed expectations in their performance. Capital expenditure of North American cloud vendors is expanding, and the sustained high growth of global computing power demand confirms the super cycle of the memory industry driven by AI, which is driving the continuous expansion of wafer fabrication plants. Starting from the second quarter, companies such as Longsys, Changxin, Hua Li, and SMIC have initiated new rounds of expansion bidding. Longsys' fourth and fifth factories are being advanced simultaneously, and Changxin's bidding volume for this year is approximately 100,000 wafers. In the consumer electronics sector, the domestic memory chip breakthroughs are accelerating, with Apple and Android brands already connecting with Longsys and Changxin's supply. The long-term expansion expectations are clear.