Everbright Futures 0402 Hotspot Tracking: Rising costs meet tightening supply, PX short-term strength hard to retreat

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Beijing Time: Today at 9 a.m., U.S. President Donald Trump delivered his first nationwide TV address since the outbreak of the Israel-U.S. conflict. He stated that the recent rise in gasoline prices is only temporary, and U.S. oil production will soon increase significantly. Meanwhile, Trump said his core strategic goal is close to being achieved, but in the next two to three weeks, there will still be “heavy strikes” on Iran. If no agreement is reached, there will be direct attacks on Iran’s energy facilities. Notably, this speech did not repeat his previous emphasis on withdrawing troops within “two to three weeks,” but instead signaled further escalation of strikes. After the speech, Iran quickly responded with missile launches. As a result, international oil prices surged; at press time, WTI crude oil intraday maximum increase reached 8.34%, Brent crude oil increased by up to 9.17%, and the domestic energy and chemical sector collectively strengthened, with oil-related products leading the gains.

As a direct downstream product of crude oil, PX0> para-xylene (PX) performed strongly driven by cost factors, with gains approaching 7%. Fundamentally, downstream PTA operating rates remain high, supporting strong rigid demand for PX. Meanwhile, due to ongoing expectations of oil supply disruptions in Asia, refineries have been forced to reduce cracking capacity, with more maintenance units increasing, further tightening PX supply. Driven by the resonance of costs and supply-demand fundamentals, PX prices have shown strong performance. Looking ahead, considering that the market generally believes that the Israel-U.S. conflict will be difficult to significantly de-escalate in the short term, geopolitical risk premiums will continue to inject into energy and related chemical products. Additionally, supported by PX’s own supply and demand fundamentals, its prices are likely to remain relatively strong in the short term. It should be noted that geopolitical situations are highly volatile; any action or signal from either side could trigger sharp fluctuations in prices. Traders should strictly limit risks within controllable ranges.

Source: Everbright Futures Research Institute, Wall Street Insights

Written by: Yao Tao

Professional Qualification: F3082336

Trading Advisory Qualification: Z0018553

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