When can PET bottle chip industry run reach 90%?

In one of the previous insights, we projected that the operating rate of PET bottle chip factories in March might have a chance to reach 90%. Many industry friends upstream and downstream have been consulting on this, believing that the current proportion of PET bottle chip capacity in polyester sector is increasing, and its O/R changes will have a certain impact on the trend of upstream raw material futures. So, what is the probability of reaching this 90% figure, and when is there a chance to reach this peak?

Currently, with the partial return of previous turnaround facilities and the upward adjustment of O/R of some plants, the average operating rate of domestic PET bottle chip factories has risen to around 85% (calculated on a design capacity base of 17.26 million tons). In the later period, some plants may still raise O/R, include Sanfame 900,000 tons (500,000 tons may restart after turnaround), Anyang Chemical 300,000 tons, Anhui Haoyuan remaining 300,000 tons and Sinopec Yizheng that turned to produce PET fiber chip. Theoretically, excluding additional new maintenance plans, the highest O/R could reach around 93%. However, currently, it is unlikely that this part of the capacity will immediately recover in the short term. It will still take some time. The remaining Yisheng Dalian 350,000 tons new capacity is expected to start production around the end of March, with minimal impact on overall supply in March. Therefore, we believe that the probability of PET bottle chip industry run reaching 90% in the first half of March is not high, but if the large facilities mentioned earlier can restart early, there is a chance to touch the 90% mark around the end of March.

Additionally, the remaining two sets of 600,000 tons of new PET bottle chip equipment at Yisheng Hainan may be delayed in production. There is no commissioning plan expected in the first half of the year. Meanwhile, Wankai plans to take turns to turnaround around the second quarter, which will exert certain pressure on the upper limit of PET bottle chip O/R. Of course, there are plans for several small facilities to start production, such as Sichuan Hanjiang 300,000 tons, Xinjiang Tunhe 100,000 tons, and Xinjiang Yipu 120,000 tons, but the overall impact on market supply is limited, especially in the East and South China markets. And there is still uncertainty about whether they will start production. Therefore, after reaching 90% of the running rate, the O/R of PET bottle chip factory may return to the current level or slightly below in April-May.