SunSirs: Retreat After Surging—China PET Bottle Chip Prices Fluctuate Widely at High Levels in May

I. Price Trends for the Month (May 2026)

Futures (ZCE Bottle Chip Main Contract: PRZL2)

At the beginning of the month (May 6), the price stood at approximately 8,892 RMB/ton. Prices fluctuated at high levels during the middle of the month before plummeting on May 22 to 7,906 RMB/ton. By the end of the month (May 27), prices had rebounded slightly to 7,790 RMB/ton. Overall, the market retreated from its highs and experienced wide fluctuations throughout the month, with an amplitude of approximately 12%.

Spot Market (East China, Water-Bottle Grade, Ex-factory, Tax-inclusive)

At the beginning of the month, prices ranged from 8,500 to 8,700 RMB/ton. By the middle of the month, prices surged to a high of 8,900 RMB/ton. During the latter half of the month, prices retreated to the 8,150–8,400 RMB/ton range. By the end of the month, prices in some localized areas hovered between 8,000 and 8,300 RMB/ton, with trading activity remaining relatively sluggish.

II. Key Driving Factors

1. Cost Side: Dominated by Fluctuations in Crude Oil and PX/PTA

Amid geopolitical stalemates in the Middle East and restricted shipping through the Strait of Hormuz, crude oil prices remained firm. Consequently, PTA processing margins remained robust, providing strong bottom-line support for bottle chip production costs.

However, during the latter half of May, a correction in crude oil prices and a weakening of the PTA market triggered a subsequent decline in bottle chip prices.

2. Supply & Demand: Peak Season Demand + Export Support; Supply Recovers Slightly

Demand: May marked the peak season for beverage consumption; soft drink production rose by 3.7% year-on-year, while bottle chip consumption increased by 17.6% year-on-year. Exports remained strong (up 1.7% year-on-year for the January–March period), and the price spread between domestic and international markets remained wide—with FOB prices exceeding 1,500 USD/ton—providing significant underlying support for spot market prices.

Supply: The operating rate stood at 72.8% (a month-on-month increase of 0.6%). With the restart of Yipu’s 120,000-ton facility and the commissioning of Shaoxing Tiansheng’s new 200,000-ton facility, expectations regarding tight supply have marginally eased. Factory inventories currently stand at 8.86 days' worth of stock, remaining at a relatively low level. 3. Processing Fees and Basis

Spot processing fees currently stand at approximately 1,600 RMB/ton, while futures-implied processing fees range from 1,000 to 1,100 RMB/ton; the short-term trend is bullish, though prices face downward pressure at elevated levels.

The basis remains at a high level (exceeding +500 RMB/ton), indicating that spot market strength outpaces the futures market, thereby providing support for near-month contract prices.

III. Market Summary and Outlook

Monthly Summary: Driven by cost factors, firm demand during the peak season, and support from export markets, prices surged at the beginning of the month, consolidated in the middle of the month, and retreated during the latter half in tandem with a correction in crude oil prices. Overall, the market experienced wide fluctuations at high levels, with the spot market demonstrating greater resilience than the futures market.

Short-term (June) Outlook:

Trading Range: Futures: 7,500–8,500 RMB/ton; Spot: 8,000–8,500 RMB/ton.

Underlying Logic: Cost-side support remains intact; firm demand associated with the peak season continues; and export performance remains stable. However, the release of new production capacity and the dampening effect of high prices on purchasing activity are expected to result in high-level consolidation, with the price center of gravity shifting slightly downward.

Key Focus Areas:

The geopolitical situation in the Middle East and fluctuations in crude oil prices.

The pace of restocking driven by firm demand from domestic beverage manufacturers.

Trends in bottle flake export orders and price spreads.

The progress of new production capacity coming online.

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