China PET bottle chip export order intake reaches historical high in Sep 2021 – ChinaTexnet.com
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China PET bottle chip export order intake reaches historical high in Sep 2021

2021-10-18 08:10:43 CCFGroup

According to CCFGroup statistics, China PET bottle chip export order intake has reached 410kt in Sep, year on year growing 140%, nearly flat to historical high of Nov 2018. Sep PET resin output was merely slightly above 800kt, hence exports has possessed more than 50% of total supply in Sep.

Since end-Jul, China PET bottle chip factory export order intake began to enhance. In the second half of 2021, export sales growth was mainly supported by continuously rising feedstock cost and hiking shipping fee. There are many contradictions in the global supply chain, overseas customers have no choice but to purchase in China in order to ensure stable production under the epidemic.

This round marked both rising price and volume. If manufacturers have certain advantages in sea freight, such as choosing bulk transportation, then the profit is still quite good.

Unlike this round, the sharp rise in export orders in November 2018 is due to the decline in the cost of raw materials. At that time, there was a sharp decline in crude oil value, the market mentality of PET bottle chip players was pessimistic, and prices continued to explore new lows of the year. As a result, the price advantage of Chinese PET bottle chips can be reflected. We can say that the booming export orders were mainly obtained by bargaining in exchange for quantity in that year. Therefore, although the book profit of the year is OK, the domestic PET bottle chip factory did not admit that thay had achieved the expected profit target in exports in 2018.

However, the impact of the two rounds of export orders boom on the domestic market is similar, that is, it has greatly supported domestic sales and digested some of the inventory. As the export order is tolerable, and domestic sales have also expanded previously, closed PET bottle chip plants gradually resumed, the market supply is also increasing. However, considering the continued implementation of the“Dual Control”policy, it is not ruled out that there will be more bottle chip plants to arrange maintenance plans in the later stage. Its worth attention, and it is difficult to judge for the time being.

At present, it can be basically confirmed that China PET resin export delivery volume will not be too small from September to October, respectively estimated at around 250-300kt in September and 350kt in October. However, it will depend on the final arrangement of shipping schedule.

From the point of view of this year's shipments, it is necessary to look at the entire export shipments in 2-3 months, and the export data of one single month cannot fully reflect the sales situation of that month. So if we look at the balance sheet of supply and demand from this expected data, even if there is a significant decline in downstream operating rate from September to October, at the same time, bottle chip factories maintenance plans are also intensive, so it is expected that total PET resin inventory will drop to less than 1.2 million tons by the end of October, down nearly 700kt from the high at the beginning of the year.

This means that if you remove the 300-400kt to be shipped for export and about 400kt factory spot inventory, then there is only about 400kt left in circulation. If the old stock that was previously hoarded is removed, there is still a gap to fill traders and some downstream plants’restocking demand, which can be seen from the intensively replenishment by traders in late September and early October. Of course, this is also based on the current good performance of the export market. In the later stage, if the export sales is not sustainable, then before the year-end replenishment comes, PET bottle market may still face certain sales pressure.

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