PET flakes prices go upward amid tight supply

Since the onset of the plum rain season in the middle and lower reaches of the Yangtze River, heavy rainfall has persisted. Parts of northern Hunan, eastern Hubei, southern Anhui, central-southern Jiangsu, central Guizhou, and northern Guangxi have experienced accumulated rainfall exceeding twice the usual levels for this time of year. Rainfall in some regions such as Huangshan in Anhui and Guilin in Guangxi have recorded between 600 to 740 millimeters.

According to the latest forecast from the China Meteorological Administration, from the 24th to the 30th of this month, regions including northern parts of southofthe Yangtze River, eastern and southern Jianghan, Jianghuai region, Guizhou, and Guangxi will continue to experience persistent heavy rainfall. Daily rainfall is generally expected to be heavy to torrential, with some areas in southeastern Hubei, northeastern Hunan, southern Anhui, northern Jiangxi, and western Zhejiang possibly encountering severe and extremely severe downpours.

Recent continuous rain in Central China, East China, and South China has impacted the recycling of raw materials, resulting in generally low market supply, particularly in Guangdong, where the sporadic rain has persisted for nearly three months. In short, the rainy weather is expected to continue across various regions for some time.

Despite overall sluggish sales in the recent period for recycled chemical fiber plants, with low operating rates and accumulated inventories, raw material supply remains tight, unable to meet their demands. Prices of PET flakes for HC re-PSF have rebounded earlier than usual peak supply seasons of previous years, by about half a month compared to 2023, and are currently higher by 200-300yuan/mt compared to the same period last year. For the reason, weather condition is one aspect. More important reason is the reduced supply of conventional PET flakes for recycled PSF due to more supply to sheet and 3A-grade white flakes. Besides, the actual consumption of soft drinks and drinking water decreases due to economic downturns. For 3A-grade white flakes, current prices are 500yuan/mt higher than 2023. As demand for re-PET chip and high-end and eco-friendly re-PFY is weak in slack season, prices lack effective upward stimulus, and maintain flat. Prices of popcorn made of PFY waste continue to be firm after the Spring Festival holiday, and affected by the supply and demand, prices are higher than the blue and white flakes for HC re-PSF for long time, keeping in a consolidation.

On concern about the weather condition and market supply, together with the stimulus from the higher virgin polyester prices recently, prices of blue and white flakes for HC re-PSF, which have been at a yearly low level, may continue to rise later.