Raw Material Prices Drag Down, China PET Market Showed a Weak Downward Trend Last Week

According to the Commodity Market Analysis System of SunSirs, as of March 7th, the average sales price of PET was 6,162 RMB/ton, which was dragged down by the raw material price. Last week, the price showed a weak downward trend.

In terms of cost, the international crude oil market was affected by geopolitical easing, OPEC+ production expectations, and the accumulation of US refined oil inventories. The weekly average price of Brent crude oil fell 2.15% month on month to $73.87 per barrel, weakening the cost support of the polyester industry chain. The PTA processing fee is at a low level (300-350 RMB/ton), and the improvement of the supply and demand structure of ethylene glycol is limited. The price focus of both has shifted downwards, further dragging down the cost of polyester bottle chips.

On the supply side: The polyester bottle chip industry is at the end of its capacity expansion cycle, with plans to add 2.15 million tons of new production capacity by 2025. Coupled with the current high inventory level during the same period, market concerns about oversupply have intensified. Despite weak demand, the operating rates of major production enterprises remain high, leading to a continuous increase in supply and exacerbating the supply-demand imbalance.

In terms of demand, downstream enterprises have limited demand for replenishing inventory after the holiday, and traders and end users are mostly adopting a wait-and-see attitude. The market lacks momentum in chasing price increases, and actual transactions are light. The weak recovery of terminal demand in the polyester industry chain and the accumulation of inventory of polyester filament and other products indirectly affect the confidence of the bottle chip market.

In response to the current market situation, SunSirs believes that the lack of upward driving force in crude oil and raw material prices, coupled with the release of new production capacity and inventory pressure, is difficult to alleviate. In the short term, the price of polyester bottle chips may continue to fluctuate weakly. The actual trend still needs to pay attention to the subsequent equipment and demand situation, as well as the cost support under the traction of crude oil.