China PET bottle chip export delivery intensive in Mar-Apr, but distant cargoes difficult to negotiate – ChinaTexnet.com
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China PET bottle chip export delivery intensive in Mar-Apr, but distant cargoes difficult to negotiate

2021-04-06 09:40:11 CCFGroup

According to CCFGroup statistics, China PET bottle chip export order intake was around 280kt in March 2021, increasing 1.6% from a year earlier. Mar delivery volume is expected at more than 300kt, flat or slightly higher than the same period last year. So far, based on a rough understanding of shipping schedule, shipments in April are expected to be higher than in March, while PET bottle chip export volume was merely 230kt in April 2020.

In Q1, China PET bottle chip export sales performed well. On the one hand, the price advantage was obvious, and many plants in Europe and US cut down O/R or closed due to bad weather, while local demand for PET packaging and drinking water increased significantly, hence many orders returned to the Asia market, especially Chinese mainland. On the other hand, although shipping costs have declined after the holiday, containers’ vacancy rate in Europe and US was still high. Local vacant containers continued to pile up, and it is reported that returning containers is only less than 1/3 of that in the previous period. So the shipping schedule in Chinese mainland area is still tight.

According to the understanding of some large bottle chip manufacturers, in H1 Mar, basically there is pricing, plants could get export orders, but mostly are near-term cargoes. Overseas buyers are in a hurry to deliver goods, and many customers even begin to make inquiries with domestic traders. However, with the sharp correction down in the prices of upstream raw materials in H2 Mar, most overseas customers are not optimistic about the second half of the year, and it is not easy to negotiate long-term orders. As a result, export orders shrank significantly in the second half of the month. At present, export quote of Asian PET bottle chip factories has also been chopped by tens to hundreds of US dollars compared with the previous period. Thanks to the good sales in previous stage, part of the factories have begun to sell Jun-Jul goods. Few plant could still negotiate Apr-May cargoes in Mar, and also announced to discuss May-Jun goods at the beginning of this month.

In terms of Europe and America, where production cuts are concentrated in the early stage, local supply of raw materials and PET bottle chip shall gradually pick up in the second quarter. But cost of raw materials is high within short, operation rate of downstream PET bottle chip factories may still be affected.
In the Americas, with raw material plants restarting, average operating rate of downstream PET bottle chip factories also rallied to 70-80%. However, due to the impact of the epidemic in Q1, many consumers began to eat prepackaged food and store a certain amount of bottled water at home, so the growth rate of PET demand has accelerated. Supply is still in shortage in the short term. However, with the implementation of the vaccine, many overseas organizations have lowered their forecasts for demand growth in the second half of the year.

In European Union, plants that shut down previously are expected to resume normal operation in April. Meanwhile, downstream customers have recently begun to consider increasing the shipping schedule for May-June delivery after the congestion of the Suez Canal. However, due to the poor performance of polyester raw material prices in Asia, for now, customers in Europe and US may still have some hesitation in the negotiation of new orders.

To sum up, in later stage, with the recovery of the local market in Europe and the United States, the price gap with Asia may gradually disappear, and Chinese PET bottle chip factories may face some challenges in export sales in the second half of the year.

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