This week (March 9-13), the polyester bottle chip market experienced a strong upward trend, with a maximum daily increase of 13% and a weekly cumulative increase of nearly 30%. The intense market performance and rapid pace were unexpected by all parties in the market. At present, PET bottle flakes are in a complex pattern of multiple driving factors intertwined and resonating – the high volatility of crude oil on the cost side supports sentiment, major supply side factories concentrate on reducing production and tightening circulation, and the traditional peak season on the demand side steadily releases demand. The rare simultaneous upward momentum of the three forces has pushed the market out of the typical structural upward path of “upstream raw material pressure and downstream passive follow-up”. As of March 13th, according to the price data from Shengyi Society, the mainstream average spot price of polyester bottle chips in East China is 8965 yuan/ton.
1、 Cost side (core reason)
Geopolitical ‘black swan’ detonates cost nuclear bomb, causing a surge in crude oil/PX/PTA/MEG prices across the board
The extreme event of near interruption in the Strait of Hormuz is the “igniter” and core cost driver of this round of market trend. This is not an ordinary crude oil fluctuation, but a “supply crisis” where 20% of global oil supply is facing the risk of interruption, and the resulting cost increase is rigid and severe.
The latest data shows that the latest price of WTI crude oil is $92.70 per barrel, an increase of over 6%. This cost hurricane at the source is rapidly spreading downstream along the industrial chain, indicating that cost pressure is rapidly spreading downstream.
The processing fees of the bottle chip factory have been severely squeezed, and they can only passively keep up with the price increase and seal the plate to ensure profits.
2、 Supply side (driving a significant increase)
The production rate of bottle flakes is relatively low, with a significant decrease in production in February compared to the previous month. There is also a low inventory of spot goods and a shortage of low-priced goods.
Multiple large factories have closed down their sales and continuously adjusted prices, further tightening market liquidity.
Red ocean freight rates have skyrocketed, export quotes have been raised, and internal and external markets have resonated and risen.
3、 Needs and Emotions (Amplify Increase)
The peak season for beverages and packaging has started, with stable demand and strong buying sentiment. Downstream buyers are chasing orders and hoarding goods.
The traditional beverage consumption stocking season that began in March has provided a certain demand side absorption and time buffer for the current high prices. The existence of peak season demand has temporarily increased downstream tolerance for price increases and provided confidence for midstream traders to “buy up”, forming a short-term positive cycle. From the price data, the price of East China water bottle slices skyrocketed from 7030 yuan/ton on March 6th to 7800 yuan/ton on March 11th, and now approaches 9000 yuan/ton today, with a staggering weekly increase. Such a huge increase was achieved against the backdrop of peak season, partially confirming the supportive role of demand during peak season. At present, it is the traditional procurement peak season in March, and downstream beverage factories are stocking up for the upcoming summer consumption peak, providing a certain demand foundation for high prices.
Futures funds rose, with a daily limit up and consecutive large increases, driving up spot sentiment.
Future forecast
In the short term (1-2 weeks), before the crude oil situation becomes clear and the spot shortage subsides, the price of PET bottle flakes will remain strong and prone to rise but difficult to fall. But high prices have accumulated huge risks.
Mid term (end of March April): Beware of rising and falling back
• Risk points:
Crude oil/raw materials fall, cost support weakens
◦ Bottle tablet device restarts, supply rebounds
High price downstream resistance, weak demand for essential goods, chasing price increases and cooling down
Trend: If the raw materials weaken, there is a high probability that the bottle tablets will fall back and fluctuate
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