Morning Insight: July 22, 2026

Morning Insight:July 22, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.comYu Chen WuCertification：Z0024232wuyuchen@gtht.com Main Body Polyester:Escalating geopolitical tensions have heightened supply-sidevulnerability, supporting outright prices across the polyester chainwhile upstream strength continues to squeeze downstream margins. Maintaina long Sep/Jan spread, and take profits on long EB /short PTA positions.Operating rates for PX, PTA, and MEG are currently around 60%, whileimports face persistent disruption risks due to shipping uncertainties inboth the Strait of Hormuz and the Red Sea, keeping MEG import volumessubdued. From late July onward, Zhongjin Petrochemical's PX unit isscheduled to restart, followed by the restart of Zhejiang Petrochemical's2 mtpa unit, Shenghong's 4 mtpa unit, and Fuhai's 2 mtpa unit in mid-August. As PX feedstock availability improves, PTA operating rates areexpected to recover accordingly, although the sustainability of higherrun rates remains uncertain. On the demand side, PET bottle chip operating rates continue to improve,polyester filament operating rates have bottomed out and are graduallyrecovering, and downstream order flow is showing marginal improvement.Nevertheless, the market's primary focusremains on upstream supplyrisks. With U.S.–Iran tensions still unresolved, outright prices acrossthe polyester complex are expected to remain well supported in the nearterm. Live Hogs:Near-term panic selling may emerge, while longer-datedcontracts present opportunities to position for the next cycle up. Inlate June, the widening premium of heavyweight hogs over standard-weight hogs fueled secondary fattening and delayed marketings, driving spotprices up by nearly RMB 2,000/tonne. However, downstream demand hascontinued to deteriorate in July. Slaughter volumes have fallen by morethan 20% compared with the period before the Dragon Boat Festival, whileaverage slaughter weights have risen counter-seasonally during the hotsummer months, weighing on nearby spot prices. Prices in low-priceregions such as Sichuan and Guizhou have once again fallen below RMB10,000/tonne, while standard-weight hog prices in Henan have declined toaround RMB 10,800/tonne. Meanwhile, speculative demand has largely beenexhausted, leaving limited upside catalysts in the short term. Againstthis backdrop, it is reasonable for the September contract to continuenarrowing its premium to the spot market. Since March, the industry has remained in a prolonged period of deeplosses, with negative margins accelerating capacity reduction in ameaningful way. According to the National Bureau of Statistics, thebreeding sow inventory declined to 37.8 million headat the end of June.Nevertheless, near-term market sentiment remains pessimistic, and themarket has yet to fully price in the implications of the livestock cycle.Following the disappointment of bullish expectations for July, theindustry is likely to enter a phase of panic-driven destocking andcapacity reduction. Companies with strained cash flows may beginaggressively selling lighter-weight hogs over the coming month, whichcould provide an important signal for identifying the starting point ofthe next upcycle in deferred contracts. In addition, field researchindicates a rise in disease outbreaks across Southwest China, SouthChina, and Shandong. Combined withpersistent losses, high stockingdensity, and widespread heavy rainfall, disease developments warrantclose monitoring. Once deferred contracts such as March and May haverepriced lower alongside the nearby market, they are expected to offerrenewed buy-on-dips opportunities. Open Interest Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch Source：iFind, GUOTAIJUNAN FUTURESResearch News Highlights: 1. Several Chinese state-owned enterprises (SOEs) directly administeredby the central government have recently announced share buyback plans ordisclosed that their major shareholders will increase their stakes,sending a strong signal of confidence in their valuations and the broaderequity market. China Three Gorges Renewables (Group) Co., Ltd. said its controllingshareholder, China Three Gorges Corporation, plans to increase its stakein the company over the next 12 months through open-market purchases. Thetotal amount will range between 1.5 billion yuan (about 220.86 millionU.S. dollars) and 3 billion yuan, funded by the shareholder's own capitalor self-raised funds. Metallurgical Corporation of China Ltd. said that as of Monday, it hadrepurchased over 146 million A-shares, representing about 0.71 percent ofits total issued shares, at a total cost of 415.39 million yuan. Separately, between July 1 and July 20, it repurchased over 25 million H-shares, equivalent to 0.125 percent of its total issued shares. China Petroleum and Chemical Corporation said that since launching its A-share buyback on June 18, it had repurchased abou