PET bottle chip plants operating rate to rebound ?

Earlier, we discussed whether the low point for PET bottle chips had passed. Currently, as processing spread returned to the 550-600yuan/mt. As of last Friday, the average operating rate of domestic PET bottle chip plants had rebounded to 76.4% (calculated on a base of 19.43 million tons), significantly exceeding previous expectations.

Currently, PET bottle chip capacity that has been halted is approximately 4 million tons, down from over 5 million tons previously, recovering nearly 20% of supply. A major reason for the recent gradual recovery in operations at PET bottle chip factories is the simultaneous rebound in transaction volume and processing spread. Since the beginning of July, when major bottle chip manufacturers announced output cut, CCFGroup statistics showed that there have been at least 8 days with an average daily transaction volume exceeding 30,000 tons (excluding export orders).

In terms of exports, domestic PET bottle chip factories received over 400,000 tons of new orders in July against a backdrop of rising export prices, accounting for more than 30% of July production. Preliminary statistics for shipments suggest that exports could approach or slightly exceed 500,000 tons in July, although final figures will depend on customs data. Therefore, with orders both in and abroad flourishing, inventories at PET bottle chip factories and in the wider market have decreased. Factory inventories have dropped from over 20 days to less than half a month, while total inventories have fallen from around 1.8-1.9 million tons in late June to about 1.7 million tons by the end of July.

In terms of new capacity, nearly 2.5 million tons are planned for the third quarter, including Yisheng Hainan 600,000 tons*2 projects (with one unit already launched in late July), Sanfame 750,000 tons, and Sinopec Yizheng 500,000 tons. The confirmed maintenance schedule for September currently includes Far Eastern and Dragon Special Resin. Therefore, PET bottle chip plants operating rate in August is estimated to be around 77-78% and September's peak likely to exceed 80%. Additionally, around the launch of PET bottle chip futures, it is possible that some factories will intensively launch new capacity during this period, so market participants should stay alert to developments.