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2022 PET bottle chip market review

2023-01-28 08:34:17 CCFGroup

In 2022, the extent of industry prosperity of China PET bottle chip was still high, and the average spot processing spread was around 1500yuan/mt. Export increment was more than 1 million tons, but China domestic demand began to show negative growth.


Price: rushed up first and then fell down

PET bottle chip price rushed up first and then fell down as a whole in 2022, and market price continued to rise compared with 2021. According to CCFGroup statistics, trading price for water bottle chip averaged at 8167.76yuan/mt by cash EXW and $1101.55/mt FOB Shanghai in 2022, respectively rising 19.6% and 11.7% year on year.



Capacity: expansion lower than expected

According to CCFGroup statistics, China PET bottle chip nominal capacity was revised to 12.31 million tons/year at the end of 2022, as we include Wankai phase II 600kt/year line, and Chengold 600kt/year unit acquired by China Resources. The unit of China Resources restarted in Q4 2023, and did not run at full rates, so the actual impact on market supply was limited. Sichuan Hanjiang New Material 500kt/year line is expected to be put into production before the Spring Festival of 2023, which had no impact on the supply side of the market in 2022. China PET bottle chip output totaled 11.52 million tons in 2022, an increase of 11% over the same period last year.


Company Capacity Time of start
Wankai Chongqing 600 Jan, 2022
China Resources (Chengold) 600 Oct, 2022
Sichuan Hanjiang New Material 500 End 2022
Total 1700  


In 2023, many PET bottle chip plants are expected to be put into production, including Wankai Chongqing III, Yisheng Hainan IV, Sanfame, Xinjiang Yipu, Fujian Billion, etc. However, in view of the expectation of intensively startup, the launch of some new plants may be postponed, depending on the actual launch situation at that time.


China domestic demand: negative growth

According to CCFGroup statistics, China domestic demand totaled 7.20 million tons, y-o-y down 3-4% and slightly lower than the previous expectation. Among them, sheet producers’ demand for PET bottle chips decreased significantly, with a year-on-year decline of 15%.




Cash flow: Significantly higher than 2021

Processing spread of PET bottle chip averaged at 1466yuan/mt and $189/mt respectively in 2022 (spread=PET bottle chip price-feedstock cost), obviously higher from 2021 level. However, due to the low cost of energy and labor and the technical update of equipment, the unit production cost of some large bottle chip factories reduced, and the actual profit margin is larger.


Seeing from China domestic and export sales, PET bottle chip cash flow in 2022 was good throughout the year, in which enterprises who had moderate export orders earlier or had forward orders still made profits, with a gross profit margin of more than 10% in some periods.




Operating rate: The annual operating rate was at an all-time high for most of the year

In terms of operating rate, most PET bottle chip producers operated at high rates in the first half of 2022. Although factories issued production reduction plans gradually due to rising costs and weaker demand in the second half of the year, the overall operating rate remained at a high level, and sometimes factories operated at above 100%.


PET bottle chip running rate averaged at 97.5% in 2022 based on effectively released designed capacity of 11.82 million tons, and the overall fluctuation was mainly affected by seasonal factors and changes in epidemic control policy.





In Q1-Q3 2022, due to the substantial increase in export orders, China domestic spot supply of PET bottle chips was tightened, and the overall operating rate increased significantly compared with the same period in previous years. Excluding the reduction and shutdown of the plants caused by the closure and control of the epidemic in individual periods, the overall average operating rate has been maintained at more than 100% for a long time (calculated on design capacity of 11.71 million tons).


Since the end of the third quarter, due to the fact that the delivery of orders in the early stage basically ended, the new domestic and export sales orders of PET bottle chip factories were not good, and the processing spread of RMB market was once compressed to around 800-900yuan/mt, resulting in reduced profit. PET bottle chip market ushered in a major test of the off-season, some plants announced to cut production. The average operating rate of China domestic PET bottle chip factories once dropped to less than 90% (calculated on design capacity of 12.31 million tons).


Exports: rose up sharply, with an increase of more than 1 million tons

In 2022, China's export share of PET bottle chip rose sharply, accounting for nearly 39% of total consumption. Calculating data from HS code 39076110, China PET bottle chip exports totaled 3.97million tons from January to November in 2022, YOY up 43%. If combine HS code 39076910 and the delivery statistics of factories, overall exports of PET bottle chip in the first 11 months of 2022 was estimated at 4.30 million tons, hiking 39.5% on annual basis, which had far exceeded the total export delivery volume for the whole of 2021. Considering that Nov-Dec export order intake averaged around 380kt of each month, if combine HS code 39076910 and the delivery statistics of factories, overall exports of PET bottle chip in 2022 was estimated at 4.65 million tons, an increase of 32% over the same period last year.