BOPET Industry Operating Rate Inched down in Jul 2023
The monthly average price of BOPET increased in July. As of July 28, the average BOPET price was RMB 7,943/mt, up RMB 97/mt or 1.23% M-O-M and down 11.17% Y-O-Y.
1. BOPET Price Trend
China BOPET Monthly Closing Price
In July, the BOPET price rose first and then dropped. Feedstock PTA and PET chip prices continued to rise, strengthening the cost-side support for the BOPET market. The bearish sentiment among downstream consumers has subsided as a result of feedstock price increases. Many downstream users place large orders at RMB 7,710/mt or so. The order volume at sampled enterprises was around 100kt or so, and the order level mounted up to 25 days’ worth, so the support to the BOPET market increased. The BOPET price increased, but the trading environment became sluggish. There was no discernible improvement in demand. There was no obvious improvement in demand. In H2 July, the rising momentum of feedstock prices slowed down, and the new capacity continued to come online. Thus, it was difficult for the imbalance between supply and demand to be eased. As a result, the BOPET price fell from highs. By the end of this month, BOPET price extended gains, encouraging some users to replenish at low prices. The market transactions picked up.
According to SCI, as of July 28, the negotiation price for 12μ general-purpose BOPET in East China was about RMB 7,810-8,110/mt, up RMB 100/mt from last month and down RMB 400/mt from last year. As of July 28, the average price of BOPET was RMB 7,943/mt, up RMB 97/mt or 1.23% from last month and down 11.17% from last year.
2. China BOPET Industry Operation Analysis
The overall industry operating rate trended down M-O-M. One new production line was added in July. Three production lines were shut down for maintenance.
3. BOPET Market Detailed Operation Data
The monthly average gross profit of BOPET producers diminished in July. The feedstock PTA and MEG prices rose. The rise in BOPET price was not large as that in the feedstock market.
As of July 28, the negotiation price of general BOPET was around RMB 7,810-8,110/mt, up RMB 100/mt from last month. On the whole, the average profit at BOPET enterprises was RMB -647/mt, down RMB 30/mt from last month.
According to the 14 sample companies, it was estimated that the order level for general BOPET was around 20.43 days by late July, up 7.57 days from last month and up 13.93 days from last year.
4. BOPET Market Outlook
Forecast: SCI reckons that the BOPET market will recover in August, and transactions might gradually grow. The support from the cost side is expected to increase, but the new capacity release may hinder the upward movement. With the release of seasonal demand, consumption of BOPET resources is anticipated to accelerate, which may back up the BOPET market. SCI predicts that the negotiation price for general-purpose 12μ BOPET in East China will be RMB 7,810-8,110/mt next month. It is predicted that the overall BOPET price will rise first and then fall back in the next three months. The monthly average price of BOPET from August to October 2023 is estimated at RMB 7,960/mt, RMB 8,010/mt and RMB 7,950/mt respectively.
Cost: The prices of PET chip may fluctuate upward first and then fall back in the next three months. The market price of PET chip is predicted to climb in August, owing to anticipated increases in feedstock prices, inventory decrease due to constrained supply, and an expected increase in export orders before the peak season. Overall, the PET chip price may rise due to strong supply and demand fundamentals. Winter orders may begin in the peak demand season of September to October, potentially raising prices. Furthermore, the feedstock price is expected to grow, providing cost-side support to the BOPET market. The monthly average price of gloss PET chip from August to October 2023 is estimated to be RMB 6,850/mt, RMB 6,900/mt and RMB 6,850/mt respectively.
Supply: In the next three months, 5 new production lines will still be put into use. 2 production lines will be restarted. Thus, the overall supply is expected to rise continuously, weighing on the BOPET market.
Demand: It is predicted that the seasonal demand may pick up, so the consumption of BOPET resources at downstream plants may rise, which may boost the BOPET market. As for orders, the overall order level is at more than 20 days’ worth.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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