Cost-Driven March Sees Roller-Coaster Market for Polyester Bottle Flakes

March 30 News

I. Price Trends This Month

In March, the price of polyester chip surged in the first ten days, peaked and then declined in the middle of the month, and fluctuated at a high level in the last ten days, with costs being the main driver and experiencing a roller-coaster market. According to price monitoring, as of March 30, the average mainstream spot price of polyester chip in East China was 8,800 CNY/ton.

• Early part of the month (1-15): The factory price of water bottle chips in East China surged violently: 6200→7800 CNY/ton, with a maximum price increase of about 26%. The main futures contract: 6200→9068 CNY/ton (high on March 16). Drivers: A sharp rise in crude oil prices, increased costs of PX/PTA, overseas shortages, and Chinese factories withholding sales.

• Mid-month (16-20): Futures prices peaked and then declined from 9068 to 8262 CNY/ton, falling 806 yuan in 5 days. Spot prices also adjusted accordingly, with the market shifting from a rush to buy to a wait-and-see attitude.

• Late month (21-30): Futures fluctuated and recovered within the range of 8,000-8,700 CNY/ton. Spot: East China 8,300 → 8,800 CNY/ton (30th). Closing on the 30th: Futures 8,326 CNY/ton, Spot 8,800 CNY/ton.

II. Core Market Drivers

Cost side

• Middle East geopolitical conflicts have pushed up crude oil prices, driving PX, PTA, and MEG to surge. The cost of bottle chips has rigidly increased, leading to a sharp rise in prices in early March.

• Mid-month, geopolitical tensions eased and oil prices fell, leading to a simultaneous weakening of raw material prices. The cost support decreased, and the price of bottle chips peaked and declined.

•In the late part of the month, oil prices fluctuated, raw material prices swung widely, and the prices of bottle chips oscillated at high levels due to cost.

Supply side

• China's operating rate is only about 71.5%, with major factories holding back sales and limited spot circulation, coupled with low inventory levels, exacerbating supply tensions.

• Structural shortages in North America and the EU overseas have led to a global concentration of production capacity in China. As exports divert from Chinese sources, this further drives up prices in China.

•In the late part of the month, facilities gradually restarted, slightly easing supply tensions, but the market remains in a tight balance.

Demand side

•China's beverage peak season inventory preparation has started, with rigid demand supporting prices. However, high prices are suppressing purchases, and downstream buyers are mainly procuring based on demand and focusing on digesting existing inventory.

•Overseas restocking demand surged, leading to improved export orders, which diverted supplies from China and exacerbated the supply-demand gap.

Market sentiment

• Early in the month, panic buying and holding back from selling led to a stronger basis, driving prices to rise rapidly.

• In the mid-to-late period, profit-taking and increased wait-and-see sentiment led to light trading volumes, causing prices to fall from their high levels and experience volatile fluctuations.

III. Short-term Outlook (Early April)

In April, the polyester bottle chip will mainly experience high-level fluctuations, with a range of 8,200 to 8,800 CNY per ton. The key variables to watch are: crude oil trends, the situation in the Middle East, factory operations, and the procurement pace of downstream customers.