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Insight | Time: Jan 17 2023 8:37PM  Editor:Amber
Summary of PET bottle chip industry chain before Spring Festival in 2023
 
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The Spring Festival is approaching, PET bottle market opens the holiday mode and the logistics also gradually weakens. So what is the specific performance of each link of the whole PET bottle chip industrial chain before the Spring Festival in 2023?

 

PET bottle chip factories

Key words: there are many overtaken orders, the inventory is not high for the time being, and the production schedule can last for long after holiday

 

From the current statistics, the inventory of most of the PET bottle chip factories is not high, and averages at about 11days. According to the situation of several major mainstream producers in East China, after intensively replenishment last week, except for new materials or individual bottle chip factories, most Feb-Mar export orders have been sold out, and it is suggested that the delivery of new orders should be postponed to March and afterwards. China domestic traders may replenish goods at the end of February or March. Due to the upstream raw material cost is not high at the previous stage, bottle chip factories 鈥榙emand for raw materials is large, some factories continue to purchase. Spot processing spread has maintained at above 1,000yuan/mt, and there are many overtaken orders. On the eve of the Spring Festival, with the rise in the upstream feedstock price, PET bottle chip factories offered higher slightly and inventory declined sharply. Therefore, with the approach of the Spring Festival, except for the profit-taking of some traders (around 6700-6800yuan/mt in the previous stage) or the low-price promotion of individual factories before the Spring Festival, the overall low price is rare, and the downstream counter-offer level is also gradually approaching the factory offer.


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On the export side, China PET bottle chip export order intake has improved again since November 2023, with an average monthly export order intake exceeding 380,000 tons. Recently, in Europe and the United States, due to energy, labor logistics costs and other reasons, the operating rate of PET bottle chip produces is relatively low and the price remains high. The price spread between Asia and Europe and the United States remains high. Taking into account the longer shipping schedule and the advent of the peak demand season and other reasons, many traders in Europe and the United States purchased intensively from Asian.


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Utilization rate of PET bottle chip capacity was at 96.8% based on designed capacity of 12.31 million tons/year. In addition to the plants that change production line and shutdown, most bottle chip factories have operated at higher rates to ensure the progress of centralized delivery after the Spring Festival. In the first half of 2023, traders are suggested to pay attention to the launch process of 500,000 tons of Hanjiang New Material, 750,000 tons of Sanfame, 600,000 tons of Wankai Chongqing and 300,000 tons of Yipu, and the launch process of Billion, Hainan Yisheng and Sanfame in the second half of the year.

 

Bottle blowing and PET sheet

Key words: many traders purchased at market low end in the early stage, and the proportion of bright PET fiber chip and re-PET is significantly increased, and the overall market did not catch up with rise.

 

Generally speaking, bottle blowing or PET sheet factories give downstream end-users about 3 months of acceptance or no invoice, but usually the situation of debt is relatively serious, and some even delay delivery and payment until half a year or one year. In this way, the profits that can only be extracted from processing fees are not enough to support the long-term operation of these enterprises, so some downstream factories still seem hesitant to catch up with the rise before the Spring Festival holiday as the market is not very clear.

 

In view of the small change in the upstream feedstock cost before the holiday (although polyester feedstock futures have risen recently, it is basically about the same as the price level in the previous stage), and the number of infected persons basically tend to be relatively stable after the first round of peak. In addition to some PET sheet factories with stable customers still have moderate replenishment of bright PET fiber chip and original PET bottle chips, most of the small and medium-sized downstream factories have had a holiday ahead of time, and some factories who are still in production will also set the procurement target after the holiday.

 

Downstream beverage producers

Key words: The operating rate will increase after the workers return

 

Seeing from several large beverage factories recently, as the peak of the pandemic has passed and the small peak season of demand around the Spring Festival approaches, the operating rate of large beverage enterprises gradually increased from 40-50% to 70-80% after New Year's Day. From the tracking of the purchase volume of several large factories, at present, many large water factories replenish goods till the second quarter, and some have begun to negotiate Q3 orders. Therefore, from this point of view, PET bottle chip factories鈥 delivery after the holiday a have a certain degree of protection, and the factory inventory accumulation range after the holiday will also be reduced to a certain extent.


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CCFGroup's point of view

Generally speaking, the delivery and order intake of PET bottle chip market before the Spring Festival is good, which is relatively advantageous for the factories and price may fluctuate higher after the holiday. Currently, Bottle blowing and PET sheet factories have purchased a relatively sufficient goods at a low level, the willingness to replenish after the holiday is still insufficient, which limits the upward potential of PET bottle chip price to a certain extent. In addition, during the holiday, traders are still suggested to the fluctuations of international crude oil. In recent years, sharp fluctuations often occur during holidays, which also have a certain impact on market sentiment. Market participants are also suggested to pay close attention to the changes in the overseas markets before and after the Spring Festival.


[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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