PX, PTA and polyester products cash flow

Looking at the polyester sector, PET bottle chip plants are the first to react. 950kt/year PET resin capacity is cut down since late Oct, and China average O/R inched down to 72% (O/R at 80.2% if based on designed capacity). If including some large plant turnaround plan in Nov, overall closed capacity may reach 1.55 million tons, and O/R may reduce to 68% (O/R around 75-76% based on designed capacity). If plus some plants that didn’t operate at full rate or long-term shut units, and editing out supply increase by new capacity, actual daily output affected is about 7000mt per day, which is equivalent to the annual capacity of 2.3-2.55 million mt/year. In this way, assume output cut/shutdown plan carries out as scheduled, year-end stock growth may squeeze to 250kt, substantially down from previous assessed 450-500kt.