3A-grade white flakes spread improves somewhat

Since early May, prices of 3A-grade white flakes and white bottle bales went downward and recently, the decrease continued to expand. On Jun 30, 3A-grade white bottle bales were mainly offered at 4,850-5,150yuan/mt pre-tax delivered and 3A-grade white flakes were mainly traded at 6,600-6,700yuan/mt.

For the 3A-grade white flakes spread, after a peak of 2,000yuan/mt in Aug, 2022, the spread continued to narrow in correction. For the average level, the spread was obviously lower in 2023 compared with 2022. In 2022, the yearly average 3A-grade white flakes spread was at 1,820yuan/mt, and in the first half year of 2022, the average level was 1,756yuan/mt. In the first half year of 2023, the average level was 1,609yuan/mt, 150yuan/mt lower than the same period of last year. In May-Jun, the price decline of 3A-grade white flakes was lower than that of feedstock, and plants faced less losses.

Later, with higher temperature, consumption of soft drinks and mineral water will increase, and recycling volumes of bottles are supposed to improve. The supply tightness may ease. Bottle bales prices are likely to go downward somewhat in Jul-Aug, while 3A-grade white flakes are in deficit, and prices may be relatively firm. The 3A-grade white flakes spread may continue to improve.