In the first half of August, polyester bottle chip prices weakly declined before stabilizing locally

August 15th, News

According to price data, as of August 15th, the average selling price of PET was 5,947 CNY/ton. From August 1st to 15th, the overall price trend of polyester bottle chips showed a downward trend. On August 1st, the market price of polyester bottle chips was 6,060 CNY/ton, and it fell to 5,972 CNY/ton on August 4th. On August 14th, some companies' quotes continued to fall, such as Sanfangxiang quoting 5,870 CNY/ton, Dalian Yisheng quoting 5,960 CNY/ton, and Hainan Yisheng quoting 5,880 CNY/ton. On August 15th, driven by the rebound in crude oil, prices in East China rose by 10 CNY/ton to 5,900 CNY/ton. PET market quotes increased, with Sanfangxiang rising by 30 CNY/ton, Hainan Yisheng rising by 30 CNY/ton, and Dalian Yisheng rising by 40 CNY/ton, but transactions were still mainly small orders based on rigid demand.

Cost side: Expectations of increased production from OPEC+ and uncertainties regarding U.S. tariff policies caused Brent crude oil to fall to $68.64 per barrel (down 2.21% month-on-month), directly dragging PTA spot prices down to 4,870 CNY/ton, while ethylene glycol fell below 4,400 CNY/ton. Polymer costs decreased by 0.9% month-on-month to 5,671 CNY/ton, and bottle chip processing fees recovered to 385 CNY/ton (up 86 CNY/ton month-on-month). However, production gross margins remained at -214 CNY/ton, forcing factories to maintain prices.

On the supply side, the bottle flake industry has entered a period of concentrated capacity release starting from the second half of 2023, resulting in relatively ample supply expectations. However, since July, there has been a concentrated reduction in production within the bottle flake industry. In August, major polyester bottle flake plants continued to maintain production cuts or shutdowns of 20% or more, which they began implementing in July, thereby easing inventory pressure and creating tightness in certain specifications, providing some support for prices.

Demand side: Downstream demand remains sluggish. Affected by the continuous decline in raw material prices and the depreciation of previously accumulated inventory, the atmosphere for new weaving orders has not improved significantly. Buyers still maintain a wait-and-see attitude, and downstream procurement is mostly rigid demand, limiting its impact on polyester chip prices.

Overall, it is expected that the price of polyester bottle chips in China will show a fluctuating trend. In the short term, prices are expected to rise due to cost support, with a predicted price range of 5,900-6,050 CNY per ton. However, in the medium to long term, there is still pressure from oversupply, limiting the potential for price increases.