Weak 3A-grade white flakes diminish popcorn's substitution advantage

High-quality popcorn made of direct-spun PFY waste has long been a crucial raw material for recycled PSF production, thanks to its excellent whiteness and cleanliness. This is especially true for higher-grade recycled PSF, which use a larger proportion of high-quality popcorn. In recent years, with the development of the eco-friendly recycled PSF market, demand for high-quality popcorn made of direct-spun PFY waste has been growing steadily. Owing to its favorable physical properties and a certain price gap compared with 3A-grade white flakes, it has become the primary choice for eco-friendly recycled PSF producers to replace 3A-grade white flakes and reduce raw material costs.

Since June, after a short-term rebound in Q2, domestic 3A-grade white flake prices have continued to decline-mainstream market prices have fallen from around 6,000–6,100yuan/mt to the recent 5,550–5,650yuan/mt. In sharp contrast, popcorn prices have bucked the overall market trend and risen against the tide: the CCFGroup index has climbed from 4,950yuan/mt to 5,250yuan/mt, with transaction prices of high-quality popcorn from major manufacturers even reaching around 5,300–5,400yuan/mt recently. In terms of the price spread between the two: it has narrowed from 1,100yuan/mt at the start of June to approximately 150–300yuan/mt. Notably, popcorn from the major manufacturers is mostly quoted on an ex-works basis, while 3A-grade white flakes are quoted on a delivered basis-meaning the actual price spread is even smaller. As the price spread continues to narrow, the substitution advantage of high-quality popcorn over 3A-grade white flakes s has significantly weakened.

From the recent market performance, popcorn manufacturers report that downstream buyers can no longer accept the continuous increase in prices. Some downstream plants have even stopped purchasing and using popcorn, particularly customers producing mid-grade recycled PSF. For high-quality popcorn, the number of new actual orders has been limited recently. Manufacturers are also purchasing only based on rigid demand-they note that 3A-grade white flake prices may continue to decline, so they plan to increase the usage of 3A-grade white flakes, leading to weakened demand for popcorn.

In general, the markets for high-end and eco-friendly re-PFY and re-PET chip remain sluggish. 3A-grade white flake prices lack strong support, and the overall trend is expected to be slightly weak. The price rally of high-quality popcorn has paused, with a possibility of decline not ruled out.