[PET Daily Review] Cost Support Collapses, PET Resin Market Retracts

1 Today's Summary

Polyester bottle chip factory domestic trade prices decreased by 80-250 (RMB/ton).

Today, the operating rate of domestic PET bottle chip production capacity reached 64.99%.

2. Spot Market Overview

Based on East China, today's spot price of PET bottle chips (bottle grade) closed at 6300, down 150 from the previous working day, in line with early morning expectations.

Crude oil prices declined, collapsing cost support, leading polyester bottle chip factories to lower their quotations by RMB 80-250 per ton, and the market focus subsequently shifted downwards. Some sources of supply are tight, and brand price differences are significant. January-February cargo is reportedly trading at RMB 6230-6360 or futures contract 2603 at par to a premium of RMB 10 to 100. Basis has slightly strengthened. Downstream buyers are mainly replenishing spot goods based on rigid demand. Trading is better than yesterday. (Unit: RMB/ton)

3. Production Dynamics

Today, the production capacity utilization rate of polyester bottle flakes reached 64.99%. In terms of profit, the raw material PTA price fell to 5220, MEG price fell to 3827, polymerization cost was 131.10- to 5766.03, and the profit of polyester bottle flakes was a loss of -66.02 yuan/ton.

4. Market Sentiment

Table 2: Sentiment Expectations of Domestic PET Bottle Chip Upstream and Downstream Practitioners (Updated Weekly on Mondays)

5. Price Prediction

Raw materials are still expected to decline, and cost support is insufficient. However, the supply of some goods is tight, and the short-term downward space for the PET bottle chip market is limited. It is expected that the spot price of water bottle grade chips in East China will be 6200-6400 yuan/ton tomorrow. Pay attention to changes in crude oil and raw materials.

6. Related Products

PTA Market: East China PTA market is weak and consolidating, with discussions around 5220. Spot transactions are at a discount of 70-80 against May futures. February main port delivery is discussed at a discount of 60-70 against May futures, and March main port delivery is discussed at a discount of around 40 against May futures. Spot prices are weak and consolidating, and spot basis is narrowing and strengthening. Downstream purchasing enthusiasm is not good, and overall sentiment during the day is general. (Unit: RMB/ton)

MEG Market: Today, the ethylene glycol market experienced a pullback and consolidation trend. Spot prices in Zhangjiagang opened around 3845 in the early morning. During the session, buying interest was weak, and as profit-taking pressure increased, prices fluctuated and retreated. By the end of the session, spot negotiations had fallen to the 3812-3815 range, with the spot basis trading between 05-128 and 05-125. The South China market followed the decline, buying interest was lackluster, and transactions were stagnant.

7. Data calendar

Table 3: Overview of Domestic PET Bottle Chip Data (Unit: 10,000 tons, %)