BOPET industry meeting suggests production cuts and price hikes

On the afternoon of December 3rd, leading companies in the BOPET industry held a symposium to analyze and exchange market conditions. In order to further implement the requirements of the National Development and Reform Commission and the State Administration for Market Regulation's "Announcement on Curbing Disorderly Price Competition and Maintaining Good Market Price Order," and to oppose below-cost dumping within the industry, a consensus was reached to reduce production: a20% reductionfrom the current base. During the Spring Festival period, the reduction will be further increased, expected to reach around 50%.

In addition to the production reduction agreement, there was a unanimous decision to increase the ex-factory price for standard BOPET. The guidance price for standard BOPET on December 4th was 7,510yuan/mt (ex-factory, simplified packaging, telegraphic transfer), with the transaction price not to be lower than 7,410yuan/mt (simplified packaging, telegraphic transfer, ex-factory). The guidance price for standard BOPET on December 5th was 7,710yuan/mt, with the transaction price not to be lower than 7,610yuan/mt (simplified packaging, telegraphic transfer, ex-factory).

In summary, leading industry companies are advocating for production cuts and price hikes. Currently, the BOPET industry still faces the contradiction of structural oversupply and weak domestic demand. Leading BOPET enterprises have held multiple industry meetings this year.

In late July this year, BOPET factory inventories generally rose to historical highs. Although many had previous orders in hand, most lacked specific delivery specifications. Earlier, due to periodic price adjustments, downstream demand saw pulse-like surges stimulated by low prices, but this often represented borrowing from future demand, resulting in overdraft of later market demand. Consequently, order releases gradually diminished even with price stimuli later on, and sales were significantly weaker than before. To alleviate factory inventory pressure, five leading BOPET companies implemented varying degrees of production cuts, speed reductions, and shutdowns, with operating rate reductions ranging from 12% to 27%. The operating rates of major manufacturers were basically maintained at around 70-80%. This industry conference advocates for further production cuts, but the actual implementation of these reductions requires continued follow-up.

New BOPET capacity additions in 2025 are very limited. Coupled with self-disciplined production cuts by major manufacturers, the growth rate of BOPET output this year is very limited, basically flat with last year. Currently, the processing margin for melt extruded BOPET has recovered to above 1,800yuan/mt. If calculated on an industry processing cost level of 1,300yuan/mt, there is already a profit margin of over 500yuan/mt.

Looking ahead, considering the production characteristics of direct melt polymerization units and the considerations of listed companies, there is limited room for further significant production cuts, speed reductions, or shutdowns in the short term under current conditions without extreme pressure. Further concentrated O/R reductions may occur around the Spring Festival.

Currently, under weak demand, BOPET factories still face certain inventory accumulation pressure. At the beginning of last week, driven by rising raw material costs and as downstream factories had largely depleted their raw material stocks, a wave of concentrated stockpiling occurred at the month's start. New orders from year-end to around the Spring Festival are likely to be very limited. In the short term, BOPET prices still lack strong upward support and may mainly fluctuate within a range. Further attention needs to be paid to the operational status of BOPET plants.