Recently, the price of polyester bottle flakes has fluctuated and declined. Yesterday, the price of polyester bottle flakes and water bottle materials in the East China market gave up all the gains after the Spring Festival and fell to about 6,350 yuan/ton. As May Day approaches, why do the prices of polyester bottle flakes keep falling? Where has the demand gone? Is there room for decline in the market outlook? Let’s take a look together.
The price of polyester bottle flakes continues to fall to the lowest point after the Spring Festival
Starting from February 25, domestic polyester bottle flakes Market prices continue to fluctuate and decline. As of April 21, polyester bottle flakes and water bottle materials in the East China market fell to 6,350 yuan/ton, a decrease of 900 yuan/ton from February 25, a decrease of 12.41%. Some supplies are as low as 6,200 yuan/ton. At present, the transaction of high-priced goods in the market is blocked, and negotiations are mainly focused on low prices.
Based on market performance, the editor sorted out the main reasons for the decline in the price of polyester bottle flakes:
First of all, in the fourth quarter of 2020, when the market price of polyester bottle flakes was in the “4” or “5”, it attracted a large amount of idle funds off-site to stock up. In addition, terminals bargained for a large amount of replenishment, and the social inventory of bottle flakes was high.
Secondly, after the Spring Festival, driven by costs, the price of polyester bottle flakes rose sharply. Some traders are optimistic about the peak season market for bottle flakes, with orders being sold in large volumes from April to May.
Finally, overall demand is sluggish. The concentrated production reduction and suspension of several overseas units has led to an increase in overseas order volume and price. However, continued follow-up efforts have been poor and demand has gradually weakened. In terms of domestic terminals, in the sheet processing industry, the price of bottle flakes has increased significantly compared with last year, and the lower raw material – recycled bottle flakes has replaced a large part of the demand. Compared with the same period last year, the bottle preform processing industry has slightly improved, but its performance is weaker than the same period last year. Most mainstream soft drink factories have locked in supplies for the fourth quarter in advance. Mainstream soft drink orders are mainly from bottle chip factories, so factory shipments are normal and inventory pressure is average. Small and medium-sized preform and sheet processing enterprises mainly rely on traders for supplies, and the consumption of raw materials is slow, which leads to increased pressure on traders to execute contracts that month. As the end of the month approaches, coupled with the correction in crude oil, low-priced supplies frequently appear on the market.
The supply of polyester bottle flakes factories is stable, and the inventory is expected to increase
The effective production capacity of domestic polyester bottle flakes in 2021 is 11.96 million tons. As of April 21, the overall operating load of the polyester bottle flakes industry is at 79.74%. A decrease of 0.52 percentage points from the same period last year. The decline in starts was due to an increase in production capacity of 500,000 tons compared with the same period last year. As of April 21, the daily output of polyester bottle flakes was 28,901 tons, an increase of 956 tons or 3.42% compared with the same period last year. At present, the supply of goods in some factories is tight. Most mainstream factories have no goods in stock and can only accept orders from far away months. According to statistics from Longzhong, the parking devices are: Jiangyin Chenggao’s 1.2 million-ton unit has been shut down for a long time; Zhejiang Wankai Phase II’s 400,000-ton unit has been shut down due to boiler renovation; Guangzhou Pan Asia’s 250,000-ton unit has been shut down for maintenance due to malfunctions. Zhuhai China Resources’ new 500,000-ton plant is scheduled to be commissioned and put into production at the end of April, and its incremental contribution is expected to be released in mid-May.
There is still room for decline in the market outlook
Based on the current market performance , the social inventory of polyester bottle flakes from April to May has not been fully digested. Demand is weak, prices are unable to rise, and bottle tablet prices are likely to continue to decline. Although May Day is approaching and the demand side peak season is approaching, the polyester bottle flakes market is still feeling the cold wind… For the specific extent of the decline, pay attention to the changes in cost and cash flow of bottle flakes. </p
