Why China PET bottle chip export volume doubles in Aug?

According to the Customs, China PET chip export volume totals 508kt in Aug 2022, y-o-y growing 95.6%, including 57kt for HS code 39076910, y-o-y up 36.3%, and 451kt for HS code 39076110, y-o-y rising 107.2%. Combiner two HS codes, PET bottle chip exports amounts to 470kt, YOY growing 88%.

China PET chip export volume totals 3.515 million tons in Jan-Aug 2022, y-o-y growing 46%, including 548kt for HS code 39076910, y-o-y up 19.4%, and 2.967 million tons for HS code 39076110, y-o-y rising 52.5%. Assessed from two HS codes and factory delivery statistics, China PET bottle chip exports is calculated at 3.21 million tons in total in the first 8 months, growing 48% compared with the same period in 2021, which has reached about 91% of the total export shipments last year.

In terms of Aug export order intake, the total is only about 230000 tons, down 19% compared with the same period last year. So what makes the export shipments of PET bottle chip close to the 500000-ton mark again in August?

On one side, we believe that the export shipment sent by many bulk carriers in the first half of this year was largely delayed to the third quarter due to the epidemic control. PET bottle chip factories’ export order intake averaged at 350kt per month in the first half of the year, so it is not surprising that the export shipments are close to or exceed 400000 tons from May to August.

On the other side, some of the export orders originally scheduled for shipment in July are included in the August due to further delay in shipping. According to the previous understanding, the export shipments of four large PET bottle chip manufacturers whose capacity exceed million tons, are expected to reach 750-800kt from July to August. Of which it is expected to reach around 450000 tons in July, but the actual shipment volume is less than 400000 tons. Aug-Sep will basically take over this part of the undelivered quantity. Since Aug has undertaken a lot of the delayed orders, it is reasonable for domestic spot market to become increasingly tight in that month.

In the future, since factory export order intake is around 600000 tons from July to August, based on 2-3 months shipping schedule on average, the export shipment volume in September is expected to remain above 300000 tons, which is unlikely to decline significantly. However, as domestic market gradually enters the traditional off-season from September to October, the supply tightness will gradually improve. In Oct, export delivery volume may slip to below 300kt.