Polyester Bottle Chip Prices Weakly Decline Before Rebounding in August

August 28 update

According to price data, as of August 28, the average selling price of PET was 5980 CNY/ton. In the early and mid-month, the market performance was weak, with prices under pressure and declining. In the late month, prices stabilized and rebounded slightly: as the PTA market was boosted by news of unexpected maintenance shutdowns and other factors, cost support strengthened, leading to a tentative increase in bottle chip prices. However, downstream acceptance of higher prices was limited, and the willingness to chase higher prices was not strong, resulting in a limited price increase. Overall, the market showed a fluctuating trend.

On the cost side: In August, polyester bottle flake costs were somewhat supported during certain periods by the rebound in crude oil prices. Although factors such as expectations of increased production from OPEC+ led to an overall decline in crude oil prices, fluctuations in crude oil prices typically ripple through to upstream raw material costs, indirectly influencing polyester bottle flake expenses and providing some support to pricing. Additionally, earlier declines in polymerization costs have helped partially restore bottle flake processing margins—though production gross margins remain negative. Nevertheless, manufacturers are still inclined to hold firm on prices, acting as a floor that prevents further downward pressure.

Supply has contracted somewhat: In the face of demand pressures and thin profit margins, major producers such as Sanfangxiang, China Resources, Yisheng, and Wankai have maintained a strategy of reducing production. This has kept the industry's weekly operating rate at 70.9%, controlling the supply volume and providing a bottom-line support for processing fees and prices.

On the demand side, August is typically a peak season for soft drink consumption, providing a moderate boost to demand for polyester bottle flakes. Meanwhile, major producers have reduced output at their bottle-flake facilities, leading to a gradual decline in inventory levels. Weekly operating rates remain steady at 70.9%, and manufacturers continue to maintain a consistent number of days' worth of inventory on hand. This relatively tight supply situation helps sustain processing fees and, to some extent, highlights the price advantage in the market.

Inventory pressure remains: Despite production cuts, polyester bottle flake plants continue to hold relatively high inventory levels, with available days of stock staying at a robust 16.97 days—up from 14 previously. High inventories persistently limit the room for price recovery, signaling that it will take time for market supply and demand to rebalance.

Overall, looking ahead to September and the short term, the polyester bottle chip market in China is expected to continue its fluctuating pattern, influenced by both cost and supply factors, showing an upward trend with fluctuations. The cost side has some support, and production cuts by major plants will continue to reduce inventory, with the expected price range at 5900-6050 CNY/ton.