In May, the domestic market for PET bottle chips generally exhibited a pattern of range-bound fluctuation. In the short term, prices remained firm, bolstered by raw material support stemming from geopolitical disruptions. However, industry overcapacity and resistance to high prices from downstream consumers served as the primary bearish factors weighing on the market. Overall, the market displayed the characteristics of "cost support failing to offset loose supply-demand fundamentals," appearing "stronger in the short term but poised to weaken in the medium term." The market continued to navigate the interplay between raw material volatility and expectations regarding the commissioning of new capacity, resulting in price divergence across the entire industry chain.

I. Spot Market and Regional Price Quotes (May 27 – June 3)

In terms of domestic regional spot market performance, East China—serving as the central hub for production, sales, and distribution—saw the bulk of its long-term contract transactions for the May-to-July period settle within the range of 8,200–8,450 RMB/ton. The price spread for scattered spot cargoes widened; lower-end supplies traded at 8,150 RMB/ton, while premium grades reached highs of 8,620 RMB/ton. Factory-gate quotes in South China were slightly lower than those in East China. FOB export negotiations for South China hovered between 1,120–1,135 USD/ton, while East China FOB quotes ranged from 1,125–1,145 USD/ton; export quotes softened slightly, with actual transaction prices subject to negotiation based on specific demand. North China and inland production regions adjusted their pricing in tandem with East China; however, the influx of supplies from other regions exerted downward pressure on local quotes, maintaining a regional price spread of 100–200 RMB/ton. Spot market circulation tightened temporarily as reduced operating loads at certain facilities led to a contraction in available supply; conversely, factory inventories rose steadily, pushing the industry-wide average inventory level to over nine days. Market participants showed weak willingness to procure at high price points; consequently, transactions were dominated by the locking-in of long-term contracts and scattered replenishment purchases driven by immediate, rigid demand.

II. Domestic Capacity, Production Output, and Global Supply-Demand Landscape

On the supply side, the period from 2024 to 2025 marks a concentrated cycle of new PET plant commissioning within China, signaling the industry's entry into a phase of structural overcapacity. The industry's weekly operating rate remained stable at approximately 72.8%, showing no significant change compared to the previous week. Some production units have reduced operating loads due to shortages of PTA and MEG raw materials, leading to a temporary tightening of spot market circulation. Concurrently, during the mid-to-late period of May, two newly constructed bottle chip production lines successively commenced operations, while older lines restarted production; as these new supplies gradually entered the market, earlier expectations of a tight spot supply continued to ease.

On the demand side, market performance has been divergent. The domestic soft drink sector has entered its traditional peak consumption season; from January to April, domestic soft drink output saw a slight year-on-year increase, and domestic demand for bottle chips rose by 12.4% compared to the previous year. However, high raw material prices have dampened operating rates among downstream injection molding and blow molding enterprises, leading end-users to adopt a "procure-on-demand" strategy to avoid stockpiling at high costs. On the international front, global packaging demand remains stable, making exports a crucial channel for absorbing domestic supply; nevertheless, aggressive price bargaining by overseas buyers has been evident, resulting in slight downward adjustments to export quotations.

III. Analysis of April 2026 Customs Import and Export Data

In April, domestic PET bottle chip exports continued their steady growth trajectory. Export volume for the month saw a slight sequential increase, and cumulative exports for the January-to-April period rose marginally year-on-year; stable, non-discretionary demand within the overseas packaging and bottled water supply chains provided solid support for export figures. Regarding imports, only small quantities of high-end, specialty PET raw materials were brought in to supplement supply, while imports of general-grade bottle chips remained at low levels, reflecting a continued rise in the domestic self-sufficiency rate. Overall, the foreign trade landscape is characterized by stable domestic demand, exports serving as a market floor, reliance on imports for raw materials, and domestic production geared toward exports; while exports serve as a vital avenue for absorbing domestic overcapacity, persistent price bargaining by overseas buyers continues to squeeze domestic ex-factory profit margins.

IV. Analysis of Price Linkages Between Upstream and Downstream Products

The core upstream raw materials for PET are PTA and MEG, the costs of which are anchored to international crude oil prices. Recurrent geopolitical tensions between the U.S. and Iran have repeatedly disrupted crude oil market trends, triggering significant price volatility in upstream raw materials: when tensions escalate, crude oil prices strengthen—driving up PTA and MEG costs—thereby providing cost support for bottle chips; conversely, when expectations for diplomatic negotiations turn positive, crude oil prices retreat, causing raw material costs to decline rapidly and leaving bottle chips without cost-based price support. Downstream soft drink and packaging bottle manufacturers remain under pressure from high bottle chip prices; consequently, some small-to-medium-sized factories have reduced their operating rates and slowed down raw material procurement. Meanwhile, the high cost of virgin PET has enhanced the cost-effectiveness of recycled PET; this has led to increased procurement of recycled materials, thereby indirectly diverting demand away from virgin bottle chips. The industry chain exhibits a transmission pattern characterized by upstream fluctuations in crude oil prices, midstream processing fees fluctuating repeatedly, and downstream demand remaining stable but facing resistance from high prices.

V. June 3rd Benchmark Price and Future Market Forecast

On June 3rd, the benchmark price for bottle-grade PET from SunSirs was 8462 RMB/ton, showing slight fluctuations compared to the previous period, continuing the range-bound consolidation trend.

In the short term, uncertainty surrounding the Strait of Hormuz's navigation remains, and frequent crude oil price fluctuations coupled with temporary reductions in operating rates at some plants have led to a temporary tightness in spot supply. Bottle-grade PET is expected to maintain a volatile but slightly stronger trend, with cost support limiting downside potential. In the medium term, as geopolitical tensions gradually ease and the Strait of Hormuz's navigation resumes, there are expectations of a decline in international crude oil prices. Coupled with the continued ramp-up of new production capacity and the gradual release of excess capacity in the industry, the increased supply will continue to materialize. Downstream demand during the peak season will struggle to absorb the massive supply, causing PET prices to gradually shift downwards, transitioning from a strong to a weak overall trend. In the long term, the fundamental overcapacity in the industry is unlikely to reverse. Raw material fluctuations will bring about periodic market movements, but the overall weak cycle is established.

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