PET bottle chip into slack season, eye on turnarond condition in and abroad –
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PET bottle chip into slack season, eye on turnarond condition in and abroad

2019-09-16 08:40:23 CCFGroup

PET bottle chip market was hemmed into tight range since Aug, speculative demand was suppressed as factories quote kept firm. On one side: feedstock fluctuated narrowly and frequently rushed up and retreated. PET bottle chip plants saw no operating space. On the other, PET bottle chip demand flattened and trading atmosphere cooled down. Though PET sheet is in small peak, demand is a bit scattered. Small-medium customers purchasing volume and frequency doesn't count high. For beverage plants that have built enough stock, they mainly held wait-and-see stance in Aug. End Q3 and early Q4 are mainly turnaround season for beverage factories, hence demand will typically reduce.

So far, PET bottle chip factory delivery and stock level is not as bad as expected, because there is still a certain time lag between the market price fluctuation and the actual operation. According to CCFGroup statistics, spot inventory of several mainstream bottle chip factories ranges from 8-15 days, partly higher at slightly above 15 days. Thanks to the intensive purchases by domestic and overseas buyers, PET bottle chip market was still destocking end Jul. However, due to the recent rise in raw material futures, factories are still worried about late sales, especially those who have not yet built enough low-priced raw material stocks in the early stage. Operation of upward or downward adjustment is cautious.

In terms of order intake condition in past two months, PET bottle chip new order intake was not optimistic. Jul-Aug overall sales exceeded 300kt, while that included fixed contract orders. Domestic sales were quite slack, mainly by small-medium customers. Some factories even haven’t got decent orders for half month. Traders’ sales condition was also poor most of the time.

As we expected, PET bottle chip stock level may see piling trend late Sep. With feedstock cost rising, price advantage of PET bottle chip forward goods vanished. Intensive output cutback may occur in Q4, likely after Yiheng Dalian unit is launched.

Figure 1. Part of overseas PET bottle chip plants operation condition

Country Enterprise Capacity (kt/year) Time of startup Remark
Vietnam Billion 250 May delay to Nov New plant delays launch
Oman OCTAL 500 Sep Shift to produce other products and turnaround
Thailand Indorama 200 Mid-Sep Debottleneck
Republic of Lithuania Neo 480 Jul Close for maintenance
Republic of Lithuania UAB Orion Global 260 Oct Close for maintenance

In Q4, PET bottle chip supply demand pattern may enhance modestly. Fujian Billion Vietnam plant may delay to launch in Q4. Octal shut 250kt/year PET bottle chip line in Sep, the other 250kt/year PET line turned to produce PET film. Indorama Rayong based 250kt/year PET resin unit is expected to turnaround for one and half month to debottleneck. NEO group 480kt/year PET bottle chip line has no restart new sent out. Indorama Lithuania based 260kt/year PET unit plan to turnaround for 3-4 weeks in Oct. Overall supply condition may not be too pessimistic.