Domestic bottle chip production capacity will undergo rapid expansion from 2023 to 2025, with a total increase of nearly 9 million tons over these three years. An additional 700,000 tons of capacity is planned for 2026. In 2022, China's domestic PET resin capacity stood at just 12.3 million tons. By early 2026, domestic capacity had surged to 21.5 million tons, causing significant declines in PET resin processing fees. Domestic PET resin operating rates also fell from previous full capacity to 78% utilization.
Over the past three months, PET resin processing fees have shown a marked increase. Calculated as 0.855×PTA + 0.335×MEG, the average domestic PET resin processing fee was ¥386/ton from January to October 2025, rising to ¥450–500/ton in November–December. From January to February 2026, the fee further increased to ¥500–550/ton. Following intense market competition during the rapid ramp-up of domestic bottle flake production, the market has stabilized. With new capacity additions nearing completion, processing margins are likely to operate within or slightly above the industry's marginal cost range over the next two years (most bottle flake plants operate at processing fees between 400-500 yuan/ton).
In 2025, robust growth in the polyester product export market will generate significant incremental demand for polyester. Customs data indicates that annual PET resin production will reach approximately 17.5 million tons in 2025, a year-on-year increase of 12.7%. Domestic demand is projected to total around 9.5 million tons, up 9.5% year-on-year, while exports are expected to reach about 7.5 million tons, a 12% year-on-year increase. China exports 43% of its PET resin production, with domestic sales accounting for 57%.
In 2025, overseas production capacity in certain regions will experience unstable operating rates, particularly in the EU. Most facilities will maintain low operating rates, with some announcing restructuring or force majeure shutdowns. Due to extremely low PET resin profit margins in recent years, new capacity projects in the US have been shelved, keeping import dependency at elevated levels. Benefiting from well-established domestic PTA and MEG feedstock supply chains, China's PET resin production costs remain lower than international counterparts. This competitive advantage is expected to sustain favorable export prospects through 2026.
By 2026, the new domestic BSPT capacity expansion cycle will largely conclude. Aside from the delayed second 300,000-tonne unit at Fuhai in 2025, only Nantong Kosen's planned 400,000-tonne facility remains. With supply growth slowing in 2026–2027 and demand keeping pace, overall BSPT profitability is projected to gradually recover from losses to a reasonable industry level. On the demand side, domestic PET resin demand is projected to expand further in 2026–2027, primarily driven by new demand from sheet applications, beverages, and increased production by water companies. Key application areas for PET resin sheets include electronics, on-site beverage preparation, fresh produce packaging, and outer casings. Emerging industries utilizing PET resin in sheet form are expected to steadily increase their share, further boosting demand. From 2026 to 2027, the supply-demand dynamics in the PET resin industry are projected to gradually improve. However, due to rapid capacity expansion in previous years, the industry faces pressure to absorb increased supply, making it difficult to achieve excessively high profits. It is anticipated that PET resin prices in 2026 will continue to fluctuate in tandem with raw material prices, specifically PTA and MEG.
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