June 25th, news:
I. Today’s Market Conditions and Core Spot Prices
1. Futures market (main contract for China)
Intraday amplitude: The price hit a low of 6,542 CNY/ton during the session and a high of only 6,796 CNY/ton, with a difference between the high and low reaching 254 yuan.
Intraday characteristics: The market opened with a “high opening followed by a downward trend,” with virtually no meaningful rebound. Throughout the day, the market maintained a one-sided downward trajectory, reflecting a concentrated release of bearish sentiment and leaving bulls completely powerless to resist.
Positioning and Funding Conditions: The main contract shows increased positions with downward momentum, and short sellers are strongly inclined to enter the market proactively. The technical outlook clearly signals a breakout.
2. Spot Market
The mainstream trading range for major manufacturers is 7,500–7,650 CNY/ton, down 200–350 CNY/ton compared to last Friday (June 19), with the price decline significantly widening.
Spot price: The low-end has dropped to around 7,450 CNY/ton, and the negotiation space for large orders has further expanded, with actual transactions negotiable.
Export market (FOB Shanghai): The mainstream quotation is US$1,030–1,050 per ton, down by US$30–40 per ton compared to the previous period, and overseas buyers are becoming increasingly cautious.
Forward orders (for delivery in June–July): 7600–7750 CNY/ton, with far-month prices also weakening, indicating a lack of confidence in the mid-term market trend.
3. Upstream raw materials: A full-line plunge, with the cost side experiencing a "collapse-style" downward shift.
Ethylene glycol futures: closed at 3989 CNY/ton, with a price decrease of over 5% during the day, breaking through the lower end of the previous trading range and hitting a new low for the period. Port inventory remains high, and the loose supply situation for spot goods has not changed, making it the leading declining product in the polyester chain.
PTA Futures: Moving Weakly in Sync, with Cost Support Continuously Weakening
PX: Following the decline in crude oil prices, Asian PX prices have noticeably fallen.
International crude oil: The geopolitical risk premium in the Middle East is rapidly dissipating, and market concerns about supply disruptions have largely subsided. Speculative long positions are being liquidated en masse, causing oil prices to fall continuously. Consequently, the cost center of the polyester industry chain is also shifting downward.
Aggregation cost calculation: On the raw material side, costs for bottle flake production fell by nearly 300 CNY per ton within a single day, forcing factories to continuously adjust their quoted prices downward to align with the cost curve.
II. Core Drivers Behind Today’s Decline
(1) Cost Side: The entire line has collapsed, constituting the biggest negative factor.
Geopolitical premium returns to zero: Signals of easing U.S.-Iran geopolitical relations have emerged, and the maritime blockade has been lifted. The risk of disruptions to passage through the Strait of Hormuz—previously a major market concern—has largely been eliminated, effectively squeezing out all geopolitical premiums from crude oil prices.
The chemical sector experiences a synchronized downturn: Weaker oil prices are driving an overall shift in the cost center of the polyester industry chain, with PX, PTA, and ethylene glycol following suit in turn, creating a clear transmission chain from "crude oil → PX → PTA → bottle-grade PET."
Ethylene glycol led the decline, exacerbating pessimism: Due to its high inventory and ample supply, ethylene glycol became the product with the largest price decrease in the polyester chain, directly lowering the polymerization cost of bottle chips and further depressing market sentiment.
(2) Supply Side: Expectations of easing continue to gain traction, and an increase in supply is steadily approaching.
New production capacity is set to be released in concentrated fashion: In June and July, several long-idled units are scheduled to resume operations. Coupled with the anticipated introduction of new capacity from TianSheng, Hanjiang, Kesen, and other producers—totaling over one million tons—China’s supply of bottle-grade PET flakes is expected to increase significantly in the coming period. As a result, market sentiment regarding the supply-demand dynamics after July has turned increasingly pessimistic.
Existing construction starts remain at a medium-to-high level: Currently, the industry's overall utilization rate of production capacity stays around 72%, and in-plant inventory has accumulated to 9.67 days, showing a slight upward trend, indicating growing pressure on the flow of goods.
High profits stimulated full production: At one point, the processing fee for bottle chips exceeded 1,400 CNY per ton, and the substantial profits motivated factories to maintain high operating rates. The spot market was well-supplied, with no shortage of inventory in China.
(3) Demand side: The peak season is not as strong as expected, with rigid demand procurement being the main focus, and there is no intention to chase higher prices.
Traditional peak season meets "high price immunity": Although it is the traditional peak consumption season for beverage packaging from June to August (the peak period for stocking up on soda, tea drinks, and bottled water), downstream blow molding factories and beverage companies in China generally resist the current high prices, resulting in weak follow-up orders.
Procurement mode is extremely cautious: downstream sectors only maintain essential inventory replenishment, purchasing on a per-order basis without advance stockpiling. High-priced orders are extremely rare, and market transactions are sluggish, with production and sales ratios remaining persistently low.
The growth rate of terminal beverage production is slowing down: From January to April, China's soft drink production increased by only 0.4% year-on-year, with the growth in demand falling far short of the pace of supply expansion. Although the export market has shown some growth, its size is still insufficient to offset the easing pressure brought on by weak domestic demand.
(4) Profit side: The processing fee has rapidly contracted, and the confidence of long positions has been affected. Previously, the processing fee for bottle chips once climbed to a high of over 1,400 CNY per ton, stimulating an accelerated release of supply.
With a sharp drop in raw material prices and an even larger decline in finished product prices, the current processing profit for bottle flakes has rapidly fallen to a range of 400–700 CNY per ton. The profit squeeze is becoming increasingly pronounced, further eroding bullish position confidence and narrowing the room for factories to maintain higher prices going forward.
III. Short-Term Market Outlook (3–7 Days)
1. Market Trend: Volatile with a slight downward bias; the downtrend continues.
Futures:
First support level below: 6,500 CNY/ton (a psychological threshold combined with technical support)
Strong support level: 6,300 CNY/ton (previous low area)
Upper resistance levels: 6,800 CNY/ton and 7,000 CNY/ton. Given the current market sentiment, the room for a rebound is extremely limited, and any technical pullbacks are likely to face resistance from short sellers.
Spot market:
Factory quotations tend to fall easily but rise with difficulty. Every round of raw material price drops will lead to a follow-up decrease in spot offer prices. Unless there is an unexpectedly large rebound in crude oil, the focus of spot prices will continue to shift downward.
2. Potential Bullish Factors
Sudden geopolitical disruptions on the crude oil front—such as a renewed tightening of the situation in the Middle East—trigger a pulse-like surge in costs.
Some facilities are undergoing temporary maintenance due to squeezed profits or malfunctions, leading to a short-term reduction in supply.
Downstream buyers are concentrating on replenishing inventories at lower prices, leading to a temporary surge in transaction volumes and a recovery in market sentiment.
3. Ongoing negative factors suppress
The release of new production capacity is in both the "present" and "future" stages, and the mid-term supply surplus pattern in China is basically determined.
High inventory levels of ethylene glycol are difficult to resolve, suppressing the overall cost bottom of the polyester chain in China.
Downstream purchasing attitudes are conservative, and there is a lack of sustained stockpiling momentum during the traditional peak season. The "buy high, not low" mentality prevails.
The futures market has formed a bearish trend, with the moving average system showing a bearish alignment, and the capital situation continues to be bearish.
