The recent strong performance of crude oil has boosted commodity market sentiment. The current price of dual raw materials has increased, pushing the focus of the polyester bottle flakes market to remain stable and warm. The influence of the chasing mentality has triggered a replenishment cycle in the industry, and market transactions have relatively improved. How about the continued upward momentum? Let’s take a look at the supply and demand performance:
Supply side: Domestic polyester bottle flake device change table
With the smooth commissioning of the 500,000-ton unit of Zhuhai China Resources Phase III, polyester bottle flakes have grown domestically Total production capacity increased to 12.46 million tons. The gradual increase in costs has led to an increase in cash flow losses for polyester bottle flakes. May and June of each year are the peak shipping season for polyester bottle flake factories. The factory inventory is at a low to medium level, so the probability of price increases and production reductions is low. Some factories are experiencing tight shipments, mainly foreign trade orders and domestic trade urgent needs. The Zhejiang Wankai Phase II 400,000-ton unit was shut down in early November 2020 for boiler renovation and plans to restart in mid-June. However, profits are currently at a loss and the restart may be delayed. Judging from the start-up of polyester bottle flake factories, the load of the polyester bottle flake industry in June was 82.46%, and the output in June is expected to increase slightly from the previous month to around 935,000 tons.
Demand:
From the perspective of soft drink companies, there is only one big The factory needs to replenish supply from July to August; another large factory may replenish supply for the fourth quarter, and most other factories have locked in supply in advance for this year. Due to local power cuts in the south, bottle preform and sheet processing companies have staggered production, resulting in a relatively reduced demand for bottle flakes. Overall, domestic trade demand is slightly weak. For foreign trade orders, due to unfavorable factors such as the appreciation of the RMB, increased shipping costs, and tight container space, the order volume has narrowly decreased compared with April. It is expected that the export volume of bottle tablets will continue to decline in May.
Forecast of the market outlook:
Cost side: market focus of crude oil Negotiations between the United States and Iran are still ongoing. If Iran resumes crude oil production, it will drag down international oil prices sharply. Due to the unexpected failure of Ningbo Yisheng’s 2.2 million ton unit, which was shut down for maintenance, the supply of PTA in June decreased more than expected. The spot supply is tight, and short-term deposits will be supported. However, some short fiber and filament factories have reduced production, resulting in a decline in polyester demand, and the PTA market outlook may be under pressure. In terms of ethylene glycol, if the output of newly commissioned units (Zhejiang Petrochemical, Sanning, Inner Mongolia Jianyuan) can be released smoothly, there is a certain expectation of a correction under the pressure of accumulated storage.
Overall:
Cash flow of polyester bottle flakes As losses intensify, the probability of low-priced factory shipments is low. The overall performance on the demand side is weak. Most traders have June orders in hand and are not willing to cover their positions. However, there is still support for costs, and it is not suitable to be long or short in the short-term market. It is recommended to operate with light positions with caution. The polyester bottle flake market is expected to be stable but weak in June, and water bottle materials in East China are negotiating at 6150-6450 yuan/ton. </p
