During 2016-2021, polyester industry saw a transit from boom cycle to oversupply cycle

During 2016-2021, polyester industry saw a transit from boom cycle to oversupply cycle. From 2016 to 2019, PX-naphtha spread consolidated at highs and surged in 2018. Asian PX plant operating rate fluctuated upward during the same period, rising from low point of 72% to high point of 85%. Even when the spread was squeezed in some periods during 2016-2017, PX operating rate still ticked up gradually. It reflected that when PX-naphtha spread hovered above $300/mt, producers were highly motivated to keep plant operating rate.

Starting from 2019, however, with the rapid development of refining and chemical integrated projects in China, PX capacity expanded fast. As a result of intensive competition, PX-naphtha spread got squeezed to new lows.