According to the price data from Shengyi Society, the price of polyester bottle flakes (PET) continued its weak downward trend last week. As of June 30th, the average selling price of PET was 6,012 RMB/ton.
The overall price continued to decline during the week, with spot prices dropping from 6085 RMB/ton on June 30th to 6,012 RMB/ton on July 4th, a weekly decrease of 1.19%. The main contract PR2509 for bottle tablets fell 8 RMB to 5,908 RMB/ton in the evening session, with a decrease of 618 lots in holdings and a strong bearish sentiment in the market. The prices of crude oil and raw materials PTA and ethylene glycol have declined, coupled with low downstream willingness to receive goods, resulting in multiple price reductions of 20-50 RMB/ton for factories.
In terms of supply and demand, PET supply side production cuts have been gradually implemented. Leading enterprises such as Wankai New Materials, Yisheng, and China Resources have jointly reduced production by 20%, involving a production capacity of 2.59 million tons (including 4.9 million tons of long-term shutdown equipment). It is expected that the operating rate will decrease from 89.3% to 77%. However, the initial supply contraction has not been transmitted to the spot market, and inventory pressure remains high. The demand performance is weak, and the supply and demand are slightly deadlocked. The operating rate of soft drinks remains at 80% -90%, but the inventory of end products is high, and the replenishment of inventory is only sporadic small orders for essential needs, without any driving force to chase after price increases. The export volume in May was 619,000 tons (month on month +38,200 tons), but the increase in shipping costs and the suppression of the US anti-dumping tariff of 125% increased.
Overall, Shengyi Society believes that the PET market price may experience a narrow adjustment in the short term. Focus on the execution of key production cuts, cost fluctuations, and demand recovery in the future.
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