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Insight | Time: Jun 16 2022 3:52PM  Editor:Dilys Wang
Recycled PET prices to remain firm
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Recently, international oil price trend is firm overall, leading to higher polyester feedstock costs, and polyester product prices climb up obviously. Driven by the bullish sentiment, recycled chemical fiber and recycled PET product prices also move upward. Though PX price has fallen somewhat, and PET bottle chip and PET fiber chip prices edge lower, recycled PET flakes and popcorn prices remain firm.


For the support of recycled market: first, recycling volumes of bottles reduce this year as consumption of beverages decreases impacted by the multiple outbreaks of epidemic. In the meantime, with the long-time lockdown measures in some key areas, the consumption has reduced significantly directly. Though the lockdown is lifted recently, the daily recycling volumes only recover to about 10-20% of the volumes in the same period of previous years. The reduction of recycling volumes is the main reason for the supply tightness of re-PET.


Second, the large rise of PET fiber chip and PET bottle chip has shown the price edge of recycled PET flakes in sheet field. With the larger price spread between PET fiber chip/PET bottle chip and recycled PET flakes, the cost edge of recycled PET flakes for sheet plants expands further. Take 3A-grade white flakes as an example. Bright PET fiber chip prices are at around 7,500yuan/mt in early May, and 3A-grade white flakes are at 7,400yuan/mt, so it has no advantages. Prices of hot washed blue and white flakes for HC re-PSF are around 5,800yuan/mt. The quality of flakes used for sheet is slightly better than that of flakes for HC re-PSF. On Jun 15, the price spread between bright PET fiber chip and 3A-grade white flakes has expanded to 800-1,000yuan/mt, and prices of blue and white flakes for HC re-PSF are around 6,100-6,200yuan/mt. So sheet plants have more choice on feedstock, so the supply to recycled chemical fibers reduces.

For popcorn, the supply also reduces this year compared with previous years. Operating rate of virgin polyester plants declines, and the supply of polyester drawing waste and clump reduces. In the meanwhile, sales are unsmooth, and product inventory is high, so the product shift in polyester products decreases, so the polyester drawing waste reduces. Moreover, operating rate of water-jet looms and twisting plants moves lower, so the polyester drawing waste produced during this process also declines. As an important feedstock for some close virgin PSF products, popcorn is hard to be replaced by recycled PET flakes to some extent, so prices also get certain support.


Though recycling volumes of PET flakes is expected to recover with the coming summer and the eased epidemic situation, the volumes are hard to recover to the level in previous years. Besides, recently, rainy weather persists in many regions, recycling volumes are hard to increase apparently. PET flake and PET fiber chip price spread remains large, supportive to PET flake prices. In short, PET flake prices may remain firm.

[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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