Last week, PET prices rose. According to the price data from SunSirs, as of June 20th, the average selling price of PET (polyester bottle flakes) was 6,272 RMB/ton, an increase of 2.7% from the beginning of last week.

In terms of cost, on June 19th, the Iran Israel conflict may spread to other regions in the Middle East, causing supply concerns due to intensified geopolitical tensions. Brent crude oil rose to $78.85 per barrel (+2.80%), PTA rose to $4,990/ton, and strong support from PET raw materials pushed the PET market up accordingly.

In terms of supply, some major factories have plans to reduce production. Leading companies such as Yisheng, China Resources Materials, Wankai New Materials, and Sinopec have jointly announced a 20% reduction in production starting from July. In addition, Sanfangxiang has already shut down 1 million tons and Baihong has been operating for 70% of the long-term, involving a total production capacity of 2.59 million tons (including 4.9 million tons of long-term shutdown equipment). Changes in the supply side have led to tight spot circulation in some areas, driving up the price of polyester bottle chips. However, overall, the production of bottle flakes is still operating at a high level and production capacity is increasing. In the long run, supply pressure still exists, but the slight reduction in supply in the short term has had a certain boosting effect on prices.

In terms of demand, although the recovery of downstream demand is weak, and the replenishment of inventory is mostly for small orders of rigid demand, lacking the driving force to chase up prices, the second quarter is the peak season for downstream beverage factories to stock up, and there is a certain degree of rigid demand, which provides certain support for the price of polyester bottle chips and limits the downward space of prices.

Overall, SunSirs believes that the core driving force behind the price increase is mainly supply contraction and cost push. In the short term, the price of polyester bottle chips is expected to fluctuate with the cost side.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.