Polyester Bottle Flakes Soared This Week, Then Fell Back from High Levels

March 20th News

This week (3.16–3.20), according to price data, the price of polyester bottle chips first surged and then fell from a high: On Monday, due to the significant rise in crude oil and raw material prices, tight spot supply, and the limit-up of futures, the factory price of water bottle chips in East China quickly rose from about 8,650 CNY/ton to over 9,200 CNY/ton; From Tuesday to Friday, as downstream buyers resisted the high prices, purchasing slowed down, and raw material prices fell, the price gradually declined, closing at 8,407 CNY/ton on Friday.

I. Main Cause of the Surge (Monday)

• Cost side: Geopolitical situation in the Middle East → Crude oil/Brent surpasses $100 → PX, PTA, and EG all surge sharply, providing extremely strong cost-driven momentum.

• Supply side: Operating rate is only 69-70%, factory inventory available for 7-8 days (historically low); major factories are holding back sales, and the spot market supply is tight.

• Demand side: Stockpiling ahead of the peak beverage season + strong export performance + bullish sentiment—downstream buyers are rushing to place orders and stock up.

• Futures: Capital inflows and price limits boost spot market sentiment

II. Main Reasons for the Decline (Tuesday–Friday)

• Downstream resistance: High prices are curbing procurement, and end-users are mainly focused on digesting existing inventories and making sporadic, essential purchases; price transmission is thus hindered.

• Raw material correction: Crude oil, PX, and PTA prices have fallen from their highs, weakening cost support.

• Cooling of market sentiment: Exercise caution when chasing higher prices, with some profit-taking sellers offloading their holdings, leading to a slowdown in trading volume at high levels.

Supply and Demand and Inventory

• Supply: The weekly operating rate is 69.2%, a slight increase but still low; there is no large-scale new capacity, and the spot market is in a tight balance.

• Inventory: The available days of inventory in the factory is 7.76 days, a significant decrease from the previous period and at a historically low level.

• Demand: The peak season for beverages and packaging has kicked off, but under high prices, demand remains primarily driven by essential needs, with little willingness to chase higher prices.

Next week's outlook (starting March 23)

•Range: Expected to fluctuate at a high level between 8,600 and 9,200 CNY/ton.

• Support: Low inventory, tight supply, and peak season demand still present

• Pressure: Limited downstream acceptance of high prices, raw material prices falling from high levels, and cooling of speculative buying sentiment in China