Debon Securities: PTA anti-involution is imminent, and the industry inflection point is gradually approaching

According to the Zhitong Finance APP, Debang Securities released a research report stating that the supply-demand contradiction in the PTA market is becoming increasingly prominent, and the profit margins of products are continuously being compressed. By August 2025, the price difference has narrowed to within 200 yuan/ton, with most companies falling into a loss-making state, and there is a strong demand for improvement in industry profitability. Recently, major PTA companies have begun discussions on issues such as joint production cuts in the industry, and it is expected that through strengthening industry collaboration, the supply-demand pattern can be optimized. Against the backdrop of advancing domestic "anti-involution" policies, the potential for industry collaboration, and accelerated technological iteration clearing out outdated capacity, the PTA market is expected to optimize; coupled with the gradual stabilization and recovery of domestic and international textile and apparel demand, PTA is likely to enter a new round of prosperity cycle.

Debang Securities' main viewpoints are as follows:

PTA prosperity is basically bottoming out, and the demand for profit improvement is urgent

In recent years, China's PTA capacity has rapidly expanded. According to Baichuan Yingfu, the effective PTA capacity has grown from 46.69 million tons in 2019 to 84.28 million tons in 2024, with a CAGR of 12.5%; by August 2025, it is expected to further rise to 91.35 million tons. With the rapid release of supply-side capacity, the industry's operating rate has shown a significant downward trend, reaching 78% in August 2025, a decrease of 12 percentage points from 90% in 2019, placing it in a historically low range. At the same time, the supply-demand contradiction in the market is becoming increasingly prominent, and the profit margins of products are continuously being compressed, with the price difference narrowing to within 200 yuan/ton by August 2025, leading most companies to incur losses and a strong demand for improvement in industry profitability.

The industry structure is highly concentrated, and leading companies are about to collaborate on production cuts

According to Baichuan Yingfu and various company announcements, currently, China's PTA capacity is mainly held by six companies: Hengli Petrochemical (16.6 million tons), Tongkun Co., Ltd. (10.2 million tons), XfmGroup (7.7 million tons), Yisheng (jointly established by Hengyi Petrochemical and Rongsheng Petrochemical, 22 million tons), EASTERN SHENGHONG (6.5 million tons), and SFX (5.6 million tons), with an industry CR6 of about 75%. This highly concentrated structure lays the foundation for the industry to form a good self-discipline mechanism and avoid disorderly competition. Recently, major PTA companies have begun discussions on issues such as joint production cuts in the industry, and it is expected that through strengthening industry collaboration, the supply-demand pattern can be optimized.

The advantages of latecomer facilities are prominent, and small outdated capacities are under pressure

Domestic PTA technology has undergone four rounds of iteration, mainly characterized by the large-scale of facilities. After scaling up, the investment cost per ton of PTA capacity, energy utilization efficiency, raw material consumption, and facility depreciation and maintenance costs have all significantly improved, giving PTA facilities a significant latecomer advantage.

According to Zhuochuang Information, the average processing costs of the first to fourth generation technologies are 840, 650, 400, and 275 yuan/ton respectively, with significant cost differences between generations. We believe that newly commissioned low-cost facilities are expected to gradually push small-scale, high-cost outdated capacities out of the market due to their economic advantages. According to Longzhong Information statistics, the current proportion of domestic P7 and below technology capacity is about 40%, indicating a large optimization space for PTA capacity structure. In addition, this round of technological upgrades has continuously shifted the domestic PTA cost curve to the left, further strengthening the global competitiveness of domestic PTA. Against the backdrop of the pending release of replenishment demand in the United States, domestic polyester and raw material exports are expected to maintain growth Capacity expansion nearing completion, expected to usher in a prosperity cycle

According to Baichuan Yingfu, three new PTA units are planned in China by 2025, with Honggang Petrochemical's 2.5 million tons and SFX's 3.2 million tons having commenced production in June and August, respectively. Only XfmGroup's 3 million tons unit remains to be completed, expected to be operational by October. Looking ahead, the pace of PTA production will significantly slow down. According to Steel Union, there are no clear plans for new capacity in 2026, with plans to add 2 million tons and 6 million tons in 2027 and 2028, respectively. The CAGR for capacity over the next three years is only 2.8%. Against the backdrop of domestic "anti-involution" policies, the potential for industry collaboration, and accelerated technological iterations clearing outdated capacity, we are optimistic about the optimization of the PTA landscape. Coupled with the expectation of gradual stabilization and recovery in domestic and international textile and apparel demand, PTA is likely to enter a new round of prosperity cycle.

Recommended stocks to watch

HYPC (000703.SZ), TKGF (601233.SH), XfmGroup (603225.SH), HLSH (600346.SH), EASTERN SHENGHONG (000301.SZ), SFX (600370.SH), etc.

Risk warnings

Risks include industry collaboration not meeting expectations, significant fluctuations in raw material prices, downstream demand falling short of expectations, capacity release exceeding expectations, intensified industry competition risks, and policy uncertainty risks