After Reaching a High, Polyester Chip Prices in May Showed Wide Fluctuations at High Levels in China

May 28th News

I. Price Trends This Month (May 2026)

• Futures (Zhengzhou Commodity Exchange bottle chip main contract PRZL2)

At the beginning of the month (May 6), the price was around 8,892 CNY per ton. In the middle of the month, prices fluctuated at a high level. On May 22, prices plummeted to 7,906 CNY per ton, and by the end of the month (May 27), they slightly rebounded to 7,790 CNY per ton. Overall for the entire month, prices started high but then fell back, experiencing wide-ranging fluctuations with an amplitude of approximately 12%.

• Spot (East China bottle grade, tax included ex-works)

At the beginning of the month, prices ranged from 8,500 to 8,700 CNY per ton; in the middle of the month, they surged to 8,900 CNY per ton; in the mid-to-late part of the month, they fell back to between 8,150 and 8,400 CNY per ton; and by the end of the month, local prices dropped to between 8,000 and 8,300 CNY per ton, with trading activity remaining sluggish.

II. Core Driving Factors

1. Cost side: Fluctuations in crude oil and PX/PTA are the main drivers.

• Middle East geopolitical deadlock, restricted shipping in the Strait of Hormuz, strong crude oil, firm PTA processing fees, and strong bottom support for bottle chip costs.

•In mid to late May, crude oil prices fell back, weakening PTA and leading to a decline in bottle chip prices.

2. Supply and demand: Strong demand during the peak season + export support, with a slight increase in supply

• Demand: In May, during the peak season for beverage consumption, soft drink production increased by 3.7% year-on-year, and bottle flake consumption rose by 17.6% year-on-year. Exports remained robust (up 1.7% year-on-year from January to March), with a high price differential between domestic and international markets—FOB prices exceeding USD 1,500 per ton—and spot prices providing strong support.

• Supply: Operating rate 72.8% (up 0.6% month-on-month), with the restart of Yipu's 120,000-ton facility and the commissioning of Shaoxing Tiansheng's new 200,000-ton facility, easing the tight supply expectations at the margin; factory inventory stands at 8.86 days, still at a low level.

3. Processing Fee and Basis

• Spot processing fee is about 1600 CNY/ton, futures processing fee is 1000-1100 CNY/ton, strong in the short term but under pressure at high levels.

• Basis at a high level (+500 CNY/ton or more), with spot prices stronger than futures, supporting near-month prices.

III. Technical Analysis

According to the commodity market analysis system, when the 10-day moving average is above the 20-day moving average, the probability of an increase is higher. Conversely, the probability is lower. Starting from May 7th, the 10-day moving average began to turn downward and approach the 20-day moving average, and on May 14th, it fell below the 20-day moving average, further increasing the probability of a decline.

As shown in the figure, this week's decline also confirms the accuracy of the core principles of spot market analysis in China.

IV. Market Summary and Outlook

•Monthly Summary: Driven by cost factors, strong seasonal demand, and supportive exports, prices surged at the beginning of the month, experienced volatile fluctuations in mid-month, and then declined along with crude oil’s pullback in the latter half of the month. Overall, prices exhibited wide-ranging volatility at high levels, with spot prices proving more resilient than futures prices.

•Short-term (June) outlook:

◦Range: Futures 7,500–8,500 CNY/ton; spot 8,000–8,500 CNY/ton.

◦Logic: The cost side continues to provide support, strong seasonal demand persists, and exports remain stable. New production capacity is coming online, but high prices are curbing procurement, leading to volatile trading at elevated levels with a slight downward shift in the overall price center.

Key focus:

• The situation in the Middle East and fluctuations in crude oil prices.

• Chinese beverage factory essential restocking rhythm.

• Changes in bottle flake export orders and price spreads.

• Progress of new capacity commissioning.