SunSirs: China PET Bottle Chip Prices Fluctuated Downward Last Week; Slight Mid-Week Rally Followed by a Pullback

I. Price Trends Last Week: Overall Fluctuating Decline; Slight Mid-Week Rally Followed by a Pullback

Prices opened the week at 8,380–8,450 RMB/ton. Mid-week, they rose slightly to 8,400–8,500 RMB/ton driven by a brief spike in crude oil prices, but fell back continuously towards the end of the week. The weekly average spot price was 8,335 RMB/ton, down 0.66% week-on-week. Weekend mainstream negotiations: spot prices at 8,250–8,350 RMB/ton (with actual low-end orders near 8,200 RMB/ton) and June forward contracts at 8,200–8,300 RMB/ton.

Futures (PR2607 main contract): Prices fluctuated around the 8,050 level early in the week but plunged sharply on June 4 to close at 7,488 (a single-day drop of 2.8%). Over the week, the futures price center shifted downward, the basis widened rapidly, and processing margins on the board continued to compress.

Export quotes (FOB Shanghai): 1,120–1,145 USD/ton; quotes were stable to weak, overseas buyers adopted a wait-and-see approach, and room for price negotiation on large orders increased.

II. Analysis of Core Fundamentals

1. Cost Side: Geopolitical Disruptions in Crude Oil, but Limited Support from PTA and MEG

Crude Oil: Fluctuating US-Iran geopolitical tensions caused wide price swings; despite a brief spike, downstream PET demand failed to follow through, limiting the sustainability of cost-driven price support.

PTA: Spot prices rose slightly (above 6,300 RMB/ton) driven by expectations of production cuts and inventory destocking; however, low operating rates across the PET supply chain hindered the pass-through of high raw material costs, and the rise in raw material costs for bottle chips lagged behind the decline in finished product quotes.

MEG: Spot prices at 4,610–4,630 RMB/ton; port inventories were slowly depleting, but expectations of restarting coal-based production units capped gains; overall, cost-side factors were mixed, resulting in weakened support.

2. Supply Side: Plant restarts and new capacity coming online are gradually easing supply constraints.

The industry's average operating rate stands at approximately 72.8%. Plants previously under maintenance are restarting; Shaoxing Tiansheng’s new 200,000-ton capacity is gradually ramping up, and Yipu’s 120,000-ton unit is running at full capacity, leading to a visible increase in domestic supply.

Factory inventories are slowly rising from low levels; current inventory covers 9.45 days of sales (up 0.94 days month-on-month). The narrative of tight supply is gradually loosening, and leading producers are marginally easing production controls.

Exports remain supported by steady demand (up 2.2% year-on-year from January to April), but slowing overseas demand and limited growth in new orders make it difficult to fully absorb the increased domestic supply.

3. Demand Side: Demand during the peak beverage season remains steady and essential, though high prices are deterring bulk restocking.

The domestic soft drink industry is in its traditional peak season for production and sales. Major manufacturers are purchasing based on routine monthly needs without engaging in bulk stockpiling. Small and medium-sized packaging plants are making small, on-demand purchases while waiting for potential price drops before restocking; market transactions are dominated by scattered orders for immediate needs, with no sign of large-scale restocking yet.

4. Profits: Processing margins have retreated from highs, and production profits are narrowing.

Last week, the theoretical processing margin for PET bottle chips fell from over 1,000 RMB/ton to around 950 RMB/ton. With factory profits shrinking, some smaller plants with higher costs are showing a slight willingness to reduce operating rates; however, leading producers have no immediate plans for large-scale shutdowns, as export orders remain decent. III. Market Outlook for Next Week (June 6–12)

Price Range: Mainstream spot prices in East China are expected to fluctuate between 7,950 and 8,350 RMB/tonne, with the weekly average price likely shifting down toward the 8,200 level; the fluctuation range for the PR2607 futures contract is projected at 7,300–7,900.

Market Drivers:

Bearish Factors: Continued expansion of supply, absence of concentrated restocking by downstream sectors, lack of sustained upward momentum in costs, and room for further compression of processing fees.

Bullish Factors: Demand from the peak beverage season and export support provide a floor; the potential for a sharp decline is limited, with support for "bottom-fishing" and restocking emerging at low price levels.

Overall Trend: Fluctuating with a bearish bias; a sustained sharp drop is unlikely, and the market will likely grind along the lows. Price pullbacks may stimulate some downstream restocking at lower levels, potentially triggering a short-term rebound.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.