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Insight | Time: Mar 2 2022 3:34PM  Editor:Alex Hua
China PET bottle chip price hikes to intra-year high
 
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Affected by the sharp rise in crude oil price, polymerization costs once rose to 6800-6900yuan/mt. PET bottle chip offer is adjusted up 150-250yuan/mt this morning. Talking level for Mar-Jun goods increases to 8000-8250yuan/mt, while for Jul-Aug goods rises to 8220-8355yuan/mt. Export market, mainstream discussion has lifted to $1180-1200/mt FOB Shanghai. Temporarily, as price rises too quickly, downstream customers mainly stand on sidelines, and refilling interest is not much. Deals done are mainly trader restocking activity. Some large plant has sold more than 10kt forward goods.


 Affected by the war, port loading and transportation in the Black Sea region have been paralyzed. Russia crude oil exports have been blocked, and the market cannot see the possibility of other alternative supplies to fill this gap for the time being. At the same time, the shipping stagnation in the Black Sea may not be solved in the short term, and it is entirely possible for the market to continue to trade crude oil.


Therefore, affected by the hiking cost, China polyester industry chain is forced to follow up, the prices of other crude oil-related products are also rising one after another. 


Apart from the cost-side, the conflict between Russia and Ukraine continued to escalate this week, and we also noted that recently, many transport giants have begun to suspend new bookings for sea, air and intercontinental railways to and from Russia, including Maersk, MSC and Hebrot. According to media reports, other logistics companies, including Seko logistics, have also stopped accepting Russian orders. UPS and FedEx have suspended shipments to Russia. DHL is still on the sidelines. Freight forwarding giants such as DSV and DB Schenker have suspended their operations in Ukraine, while business in Russia is normal.

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So far as we know, some bulk ships from PET bottle chip factories to Russia can still be shipped normally, and Chinese ships to Russia's Vostochniy Port have not been significantly affected for the time being. However, if bottle chip factories transport through the whole container, it is indeed difficult to book space at present. However, Chinese orders to Ukraine have been blocked because local ports have been blocked, so shipments of some factories have been urgently suspended at the beginning of the war. 


According to CCFGroup statistics, China export order intake has approached 400kt in February, the fifth month that has surpassed 370kt since September last year. In fact, this figure has exceeded our previous expectation of 300-350kt for February. 

Affected by the Spring Festival holiday, the customs鈥 export volume in February will not be very outstanding (specific data is to be released by the Customs around March 20), but the export volume from March to April may be very staggering.

 

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Overall, PET bottle chip price may keep high end Q1, supported by hiking feedstock cost and good exports.


[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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