Cost-driven, Polyester Bottle Flakes Remain Highly Volatile This Week (Mar. 23–27)

March 27 News

I. Price Trends

• Spot: According to price data, at the beginning of the week it was around 8400 → on Monday it surged to over 8700 → it quickly fell back in the middle of the week → and closed on Friday at 8520–8550. For the whole week, it slightly increased by about 120 CNY/ton (+1.4%).

• Futures (bottle chip main contract):

◦3.23: Opened at 8,300 → Reached a high of 8,774 → Closed at 8,668 (+474)

◦3.24：8198→8536→8186(-286)

◦3.25：8236→8300→8108(-202)

◦3.26：8074→8166→8104(+124)

◦3.27: Narrow-range fluctuation, closing near 8100.

•Overall: It first surged to a high, then fell sharply, and stabilized at the end of the week, showing a "rollercoaster-like" wide fluctuation.

II. Analysis of Core Market Drivers

Cost is the core factor driving market fluctuations.

This week, all fluctuations in PET prices were directly driven by the upstream cost end. The crude oil market experienced extreme volatility with significant daily price swings due to the fluctuating geopolitical situation in the Middle East. This volatility was directly transmitted to the markets of PTA and MEG, the two primary raw materials for PET, causing PTA and MEG prices to exhibit wide-ranging fluctuations, with daily price fluctuations exceeding 300 CNY per ton. Given the high dependence of PET production on PTA and MEG, the drastic changes in the cost end completely dominated the trend of PET prices, leading to rapid increases and decreases in PET prices following the raw materials. This became the core driving logic of this week's market. At the same time, the significant volatility in raw material prices continuously squeezed the processing profits of PET producers, narrowing the profit margins across the entire industrial chain.

Supply and demand performance is weak in China, making it difficult to support a one-sided price increase.

On the supply side, this week, China's PET production facilities are gradually restarting, and the industry's operating rate is showing a steady recovery. The supply of market spot goods continues to increase, and with the relatively high level of previous market inventory, the overall supply pressure is gradually becoming apparent, unable to provide sustained support for price increases. On the demand side, downstream industries such as beverages and packaging are in the traditional peak demand season, with rigid demand procurement remaining relatively stable. However, faced with the high prices of PET and upstream raw materials, downstream enterprises show a clear resistance, generally adopting a procurement strategy of buying as needed and taking it as it is used. Overall, the procurement pace is cautious, with no large-scale stockpiling at higher prices. The actual market transactions are relatively weak, and the weakness on the demand side directly limits the upward space for PET prices, causing prices to quickly fall back after a brief surge.

Market sentiment is cautiously observant, with significant divergence between bulls and bears.

Affected by the uncertainty in the geopolitical situation in the Middle East and the sharp fluctuations in crude oil and raw material prices, market participants across the PET industry chain—from upstream to downstream—have adopted a cautious, wait-and-see approach. Traders are primarily focusing on quick entry and exit strategies with light positions, avoiding large-scale stockpiling. Downstream manufacturers, meanwhile, continue to closely monitor raw material trends and are reluctant to increase their inventories lightly. The market remains divided between bullish and bearish forces: bulls, supported by high costs, remain optimistic about price resilience, while bears, citing increased supply and weak demand, are pessimistic about the room for further price increases. Overall, the market lacks clear directional guidance, and investors’ willingness to enter the market is weak, further exacerbating the volatile trend in PET prices.

III. Short-Term Market Trend Forecast

• Trend: Mainly high short-term fluctuations, following the movements of crude oil and PTA/MEG.

• Support: Costs remain the core supporting factor, with geopolitical risks not fully resolved and PTA and MEG at high levels, continuously providing bottom support for PET prices.

• Pressure: Increased supply, downstream resistance, and high prices curbing demand.

Going forward, close attention should be paid to changes in the geopolitical situation in the Middle East, trends in crude oil prices, fluctuations in the prices of PTA and MEG feedstock, operational status of PET plants, and shifts in the purchasing pace of downstream customers. These factors will collectively determine the short-term trend of PET prices.