PET bottle chip records another single-day transaction volume exceeding 100,000 tons

This Friday, China PET bottle chip price finally broke through the 5800-5950yuan/mt ex-works range, dropping to the 5700-5850yuan/mt, hitting a new periodical low. It is worth noting that as prices reached this critical low, market buying sentiment began to pick up, with downstream players and traders mostly entering the market to bottom-fish and restock, leading to a significant improvement in market trading atmosphere. As of now, CCFGroup has recorded over 110,000 tons of domestic transaction orders in a single day on Friday.

We believe that this wave of intensive restocking is mainly driven by two factors. On one hand, the current price of PET bottle chip has fallen to the low range of the year (excluding the sharp drop in April due to special macroeconomic events), reaching the psychological price point for many market participants. There is a general consensus that the current price has entered or is close to the bottom range, with limited room for further decline, making restocking relatively less risky at this stage. On the other hand, with the National Day holiday approaching, the market needs to stock up on raw materials in advance or replenish previously shorted inventory, leading to a concentrated release of rigid restocking demand before the holiday. Additionally, as the futures market declined rapidly, the basis between futures and spot price remained relatively acceptable, which to some extent also contributed to the hot market transactions.

Based on market feedback, the shipment speed of PET bottle chip plants has recently accelerated, with few plants even experiencing queuing to load. Traders have also begun to gradually build positions. As of this Friday, the average inventory days of domestic PET bottle chip plants have dropped to around 14-15 days. However, it is important to note that the fundamental supply and demand dynamics of the PET bottle chip market have not fundamentally changed. At present, as terminal orders for textiles and apparel have not shown significant improvement, the overall market expectation for upstream polyester raw material prices remains poor. Although downstream demand has been intensively released in the short term, the overall recovery strength remains to be seen. Particularly, beverage packaging demand is about to enter the traditional off-season, with insufficient support for mid-long term demand. On the export front, prices have been declining, and overseas customers have been hesitant to restock, with limited growth in new orders.

Overall, given the significant increase in trading volume in the PET bottle chip market, the 5700-5800yuan/mt range may form a certain price bottom in the short term. However, as for whether the PET bottle chip market price is expected to experience a strong rebound, considering that the supply and demand structure has not substantially improved, we are cautious about the height and duration of any rebound for the time being. It is recommended that all parties prioritize purchasing based on demand to avoid cost risks. Future market trends will still depend on multiple factors such as crude oil price fluctuations, upstream raw material trends, and changes in downstream demand. It is expected that the market will maintain a weak consolidation pattern before the holiday, and after the holiday, the market may face new directional choices, such as whether the startup of new plants will continue to be delayed and whether maintenance plants will restart, all of which will affect price trends.