Excerpt from Directors Report 30Jun2026
Paraxylene (PX) prices rose 16.4% quarter-on-quarter to an average of US$1,168.59/MT, supported by higher crude oil prices, supply disruptions, maintenance shutdowns, and the absence of Middle Eastern PX supplies. However, weak downstream demand from the PTA and polyester sectors limited the price increase, and prices softened toward the end of the quarter as geopolitical tensions eased.
PTA prices broadly tracked PX, averaging US$859.88/MT, with the PX–PTA margin improving to US$89/MT due to tight feedstock availability and low producer operating rates. Sanctions on a major Chinese producer disrupted regional trade, while high freight costs and volatile commodity prices weakened demand and increased inventories.
Pakistan's domestic polyester industry remained under pressure. Weak textile demand, expensive raw materials, and cautious buying led polyester producers to cut production. The PET sector performed relatively better, supported by seasonal demand and inventory restocking ahead of Eid-ul-Adha.
Future Outlook Summary
Crude oil prices are expected to remain driven by Middle East geopolitical developments, OPEC+ production policy, and global demand. While easing regional tensions could bring prices closer to pre-war levels, low strategic oil reserves may continue to support prices in the second half of 2026.
PX and PTA prices are likely to track crude oil and naphtha markets. Planned maintenance shutdowns and supply constraints should keep the PX market relatively tight, although weak demand from the textile and PET sectors is expected to limit price gains. Buyers are likely to remain cautious amid ongoing geopolitical uncertainty.
Domestic PTA demand is expected to improve following the five-year anti-dumping duty on Chinese PTA imports, effective June 12, 2026, while the company's energy efficiency projects should enhance cost competitiveness.
Pakistan's polyester industry is expected to remain under pressure due to weak downstream demand, high energy costs, and cheaper imported polyester staple fiber (PSF). However, management expects a gradual recovery in demand once the Middle East conflict stabilizes.
https://dps.psx.com.pk/company/LOTCHEM
