SunSirs: China PET Bottle Chip Prices Surge Then Plummet in June

I. Overall Price Trends for the Month (June 1–29)

Spot Prices (Water-grade bottle chips, East China, tax-inclusive, delivered)

Opening (Early June): 7,950–8,070 RMB/ton; the market continued the pattern of high-level fluctuation seen in May, with lingering expectations regarding cost support.

Mid-June (10th–15th): Prices experienced a rapid, steep decline; the maximum single-day drop approached 460 RMB/ton, with spot prices falling from above 7,700 RMB/ton to below the 7,200 RMB/ton mark. The primary triggers were the easing of geopolitical tensions in the Middle East and a significant drop in international crude oil prices; costs for upstream raw materials like PTA and MEG collapsed simultaneously, causing bottle chip prices to plummet in tandem.

Late June (16th–25th): The market entered a phase of repeated fluctuation at low levels with a weak overall trend; the mainstream trading range narrowed to 7,270–7,450 RMB/ton. Downstream buyers limited purchases to small volumes based on immediate needs, resulting in lackluster overall production and sales performance.

End of Month (26th–29th): The market saw a slight technical correction. Current mainstream spot quotes in East China are 7,350–7,480 RMB/ton; the main bottle chip futures contract (PR) closed at 6,712 RMB/ton—showing a slight rebound after a short-term oversold drop, though significant upward resistance remains.

Export FOB Price Trends

At the start of the month, the reference FOB Shanghai price was 1,080–1,095 USD/ton; subsequently, dragged down by continuous declines in domestic spot prices, the mainstream negotiation range retreated to 1,060–1,075 USD/ton by month-end. Overseas buyers largely adopted a wait-and-see attitude; combined with the resumption of local production facilities in Southeast Asia diverting some export demand, export orders saw a marked decline compared to the April peak. II. Analysis of Key Drivers

Cost Side: Geopolitical premium fades, cost support collapses (primary reason for this month's decline)

Between February and May, international oil prices rose due to persistent tensions in the Middle East, driving up the prices of PX, PTA, and MEG and pushing spot prices for PET bottle chips past the 9,000 RMB/tonne mark. As June began, geopolitical tensions eased and shipping through the Strait of Hormuz gradually resumed; crude oil prices rapidly surrendered earlier gains, and upstream raw material prices fell continuously. Deprived of strong cost-side support, PET bottle chip prices underwent a sharp decline as valuations corrected.

Currently, spot PTA is priced at approximately 6,300 RMB/tonne and MEG at 4,670 RMB/tonne. The theoretical processing margin for PET bottle chips remains high at 650–700 RMB/tonne, and factory profitability is decent; there is currently no short-term inclination for large-scale, voluntary production cuts, which limits the scope and strength of any potential price rebound.

Supply Side: Stable operating rates; supply-demand balance shifts from tight to loose

The industry's average operating rate held steady at 72%–74% this month. With previously idled units resuming production and new PET bottle chip capacity scheduled to come online, market expectations have shifted from the tight supply seen in the first half of the year to a looser supply environment.

Factory inventories have accumulated slightly, with current stock levels sufficient for approximately 9.67 days of operations—a marginal month-on-month increase. While overall pressure to destock is not yet acute, enterprises are increasingly willing to lower prices to move inventory, leaving insufficient momentum for a rise in spot prices.

Demand Side: Traditional peak season underperforms; demand driven by immediate needs; strong resistance to high prices

June and July typically mark the peak season for domestic beverage and bottled water consumption. However, given the sustained rise in PET bottle chip prices during the first half of the year, most downstream preform and beverage manufacturers had already secured long-term contracts and are generally cautious about restocking at high price levels. The industry's average sales-to-production ratio is below 60%, with purchasing driven primarily by immediate needs to avoid the risks associated with stockpiling. Regarding exports, domestic PET bottle chip exports reached 601,200 tons in April—a peak for the year. However, from May to June, export orders declined month-on-month due to the completion of initial overseas stockpiling, rising ocean freight costs, and the ramp-up of production capacity in Southeast Asia; this reduced the support for domestic inventory absorption.

Positive factors include: following a significant price correction this month, some downstream enterprises engaged in small-batch restocking at lower price points. Inquiry activity has warmed up slightly, acting as a brake on further price declines.

Industry Profitability: Processing margins for PET bottle chips remain high, with leading companies earning approximately 650–700 RMB per ton. Driven by high profits, there is little inclination for plant maintenance, meaning operating rates are unlikely to drop significantly in the short term; this also limits the potential for a price rebound. Should raw material prices weaken further, processing margins could face compression.

III. Regional Price Differences

East China Market (Benchmark): Spot prices for water-bottle grade chips range from 7,350 to 7,480 RMB/ton; trading is most active here, serving as a barometer for the national market.

South China Market: Prices range from 7,380 to 7,500 RMB/ton—slightly higher than in East China—supported by strong local demand for beverages.

Recycled PET (rPET) Chip Market: Prices show divergent trends due to varying environmental certification standards. Demand for food-grade clear flakes remains stable, while prices for standard recycled materials track the weakness of virgin PET chips.

IV. Market Outlook (Short-term forecast for July)

Price Range: Mainstream prices are expected to fluctuate widely between 7,200 and 7,600 RMB/ton in July, with no clear trend toward a sharp, one-sided rise or fall.

Upward Pressure: Supply is becoming looser, downstream peak-season restocking is nearing its end, and export growth is limited; prices rebounding toward 7,600 RMB/ton will face significant selling pressure.

Downward Support: There is limited room for raw material prices to fall much further in the short term; low prices will stimulate essential restocking, providing strong support around the 7,200 RMB/ton level.

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