SunSirs: China Polyester Bottle Chip Market Shows Volatility with Upward Bias and Slight Gains on July 7

As of July 7, the polyester bottle chip market exhibited volatility with an upward bias and slight gains. According to SunSirs price data, mainstream negotiated prices for spot goods (water-bottle grade, mainstream ex-factory prices in East China including tax) ranged from 6,850 to 7,050 RMB/ton, an increase of 50 RMB/ton from the previous day. After a sustained, sharp decline from mid-to-late June, the PET market has finally shown signs of stabilizing.

I. Drivers of the Rise: A Combination of Cost Stabilization and Supply Contraction Leads to a Periodic Price Recovery

The current rebound in PET bottle chip prices is primarily driven by the dual support of marginal improvements in costs and a contraction in raw material supplies. Coupled with the release of essential downstream restocking demand stimulated by low prices, market sentiment has seen a temporary recovery.

1. Crude Oil Stabilizes at Low Levels; Cost-Side Drag Eases

International oil prices found temporary support after the geopolitical risk premium was priced out, acting as the immediate trigger for the bottle chip rebound. Following the US-Iran peace agreement, shipping traffic through the Strait of Hormuz gradually resumed, and Brent crude prices fell rapidly to the $70/barrel mark, effectively absorbing the pre-conflict geopolitical premium. Currently, the market is focused on the progress of follow-up US-Iran talks; combined with a weakening US dollar, oil prices have edged upward. The downward pressure on PET prices from the cost side has been temporarily lifted, allowing market sentiment to recover. PTA supply has contracted sharply, strengthening support from the raw material side.

2. Supply Contraction Driven by Concentrated PTA Maintenance Provides Solid Cost Support for Bottle Chips

On July 6, the domestic PTA capacity utilization rate fell by 2.68% month-on-month to 52.35%. A large-scale PTA unit in East China with an annual capacity of 2.5 million tons was shut down for maintenance. Concentrated maintenance by major producers has led to a significant tightening of market supply, and social inventories continue to decline. According to Guosen Futures, downstream PET operating rates have remained stable; combined with concentrated maintenance of PTA plants, the improved supply-demand balance has driven a modest rebound in futures prices. Meanwhile, the PX sector has entered a destocking cycle; with concentrated maintenance across Asia and China in July leading to a month-on-month decline in industry operating rates, the simultaneous destocking of both PX and PTA has solidified price support for PET bottle chips from the raw material side.

3. Low-price effect emerges; downstream restocking demand sees moderate release

Following a sustained decline, PET prices have fallen by over 2,000 RMB/tonne from their April peak, entering a range acceptable to downstream buyers and gradually stimulating restocking interest. Last Friday, major soft drink manufacturers launched their August tender cycles, leading to a warming of trading sentiment in the bottle chip market this week and an improvement in export shipments. On the morning of July 6, sporadic transactions in the East China market were recorded at 6,930–6,990 RMB/tonne, driven primarily by essential restocking needs. However, downstream willingness to chase rising prices remains weak, with limited firm bids; demand is still characterized by essential, need-based purchasing.

II. Potential Pressure: Persistently loose supply limits upside potential

Despite the short-term price recovery, supply-side pressure on PET bottle chips continues to build. Factors such as plant restarts, the release of new capacity, and high inventory levels are constraining the extent of the price rebound.

The industry currently sees more plant restarts than maintenance shutdowns, leading to increasingly ample supply: Zhejiang Tiansheng has raised the operating rate of its 400,000-tonne bottle chip unit, while Sichuan Hanjiang (600,000 tonnes) and Shandong Fuhai (300,000 tonnes) have restarted operations and resumed feedstock input. Coupled with expectations for the restart of long-idled units and plans for new capacity to come online, market supply is set to increase further. While there have been some maintenance-related disruptions—such as the shutdown of Central China’s Anhua unit (300,000 tonnes) in late June due to environmental inspections (with a restart planned for late July) and the maintenance of South China’s Yisheng Hainan unit (750,000 tonnes) in early July (restart date pending)—the capacity being restarted far exceeds the capacity undergoing maintenance, leaving the industry's loose supply landscape unchanged. Meanwhile, inventories at PET chip plants continue to accumulate, with some enterprises seeing a steady, albeit slight, rise in stock levels. Compounding this, rising ocean freight costs are hampering export shipments; the resulting headwinds in the export sector further exacerbate inventory pressure at plants, continuing to weigh on prices.

III. Market Outlook (Mid-July)

Short term (1–2 weeks): Prices are expected to fluctuate within the 6,800–7,100 RMB/tonne range, with little likelihood of a significant, sustained rally or sharp decline.

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