Why PET Prices Have Risen To Record Highs

Why PET prices have risen to record highs

Recently, market practitioners focus more on POM in engineering plastics, but they do not know that the market price of another engineering plastic PET bottle sheet has unknowingly broken through the historical high, the highest to 9400 yuan/ton. So what happened to PET to make it worth so much? Listen to the story.

First, the strong rise in production costs

As is known to all, the upstream monomers of PET are PTA and MEG. As can be seen from Figure 2, PTA spot price in east China has shown an upward trend of shock in recent years. PX is the main raw material for PTA production. In recent years, the PX production capacity is too high, but the profit is not good. Especially since March this year, the plant has been frequently repaired, and the starting load is not enough, leading to the recent tight PX supply. In addition, the international oil price remains at $110 per barrel this month, which strongly supports the cost side, so the price of PX continues to rise. In addition to the rise of main raw materials, since March this year, PTA plant equipment maintenance began to increase, operating rate declined, the supply side continued to shrink. Because the production cost of PTA is too high, in order to ensure their profits and prevent deep losses, PTA prices are forced to rise, and the cost end support is strengthened.

Second, the supply of tight support

As of May 26, Guangzhou Pan Asia PET device start 60%, Dalian Yisheng PET device stop maintenance, Zhejiang Wankai PET device small line to produce light slices. (5/20-5/26) Domestic weekly production of polyester bottle flakes was 21,200 tons, down 0.3 tons from the beginning of the month (4/29-5/5). (5/20-5/26) The average starting load of domestic polyester bottle flakes was 85.02%, 1.21 percentage points lower than that of the beginning of the month (4/29-5/5). In addition, repeated domestic public health events, logistics and transportation continue to be limited, the spot circulation of PET bottle tablets in some regions is tight, so the supply side support is acceptable.

To sum up, the strong support of the cost side, coupled with tight supply, is an important reason for PET price to break through the high level. However, the downstream demand continues to be weak, and the acceptance of high price sources is not high. And with the alleviation of the epidemic, spot circulation of polyester bottle flakes gradually recovers, and the market price will eventually fall. It is expected that in the short term, the PET bottle chip market runs at a high level. In the long term, there is a downside risk. Personal opinion, for reference only.