Polyester bottle tablets: Supply expectations increase and pressure in the future market is increasing

Since the beginning of April, China's polyester bottle sheet market has been in a turbulent correction trend. Among them, the spot market in East China has gradually dropped from a high of 7,900 - 8,000 yuan/ton to 6,950 - 7,050 yuan/ton, a drop of 11.95%. The main reason for the market decline was the correction in the PTA market for polyester raw materials, which put pressure on the market on the cost side. Since the beginning of April, the main PTA contract closed from 6398 yuan to the lowest on May 16 to 5208 yuan, down 1190 yuan, or 22.85%. The spot market closed from a high of 6540 yuan/ton to a lowest on May 15. It fell to 5475 yuan/ton, down 1065 yuan/ton, a drop of 16.28%. In the second half of the month, the PTA futures market rebounded slightly, but the overall strength was weak. The closing price of the spot market has been hovering around 5,500 - 5,570 yuan/ton. Supported by costs, starting from the second half of the month, China's polyester bottle sheet market has been at a low level.

Table 1. Statistical table of China's new production capacity plan for polyester bottles and chips in 2023

From the supply side, mainstream bottle and tablet manufacturers have recently started operations to maintain high-load operations, market spot has maintained a normal supply state, and the shortage of spot resources has eased. Although a 150,000-ton unit in Yizheng was switched to production on May 23, it has little impact on the overall market. At the end of March this year, after the 600,000-ton new plant in the Hanjiang River in Sichuan was put into operation, the current operating load remains at 50%. Under the expectation that Wankai and Sanfangxiang new units will be put into operation, the supply of polyester bottles and chips in China will gradually increase in the later period. Wankai's new 600,000-ton unit in Chongqing Phase III is currently in the debugging stage and the production date is approaching. The new 750,000-ton unit in Sanfang Lane is expected to be put into operation in June, but the exact date is not yet determined. The second phase of Hainan Yisheng Petrochemical project, including a 1.8 million ton PET production unit, is initially expected to be put into operation in the second half of the year. China Resources Jiangyin's other 600,000-ton unit will be opened based on market conditions, so there is a great uncertainty about the commissioning time. Therefore, the supply pressure on polyester bottle chips will gradually increase this year.

From the demand side, after the epidemic, residents 'consumer confidence and willingness to consume have increased, especially the surge in consumption during the May Day holiday and the strong recovery of the tourism market, which also reflect the recovery process of China's consumer market. Boosted by the peak consumption season, Chinese beverage companies have generally higher operating loads, which also provides strong demand support for polyester bottles and tablets.

Regarding the future outlook, as supply in the future is expected to increase significantly, the downstream enthusiasm for continuing replenishment is weakened. In addition, the current market trend is still weak, so the overall trading atmosphere in the market is weak and market confidence is insufficient. Therefore, the short-term polyester bottle sheet market will still maintain a stalemate and finishing pattern. It is still necessary to pay close attention to the trends in the raw material market and changes in the market supply and demand side.