Recent BOPET Units Production Analysis
Entering September, more BOPET units were shut down. According to the statistics of SCI, 21 production lines were shut down.
As of late August 2022, China’s total BOPET capacity rose to 4,842.1kt/a, up 287kt/a from late 2021. The production lines increased by 8 to 216. According to the incomplete statistics of SCI, the capacity of BOPET units, which were in shutdown, totaled 610kt/a, accounting for 13% in China. It is estimated that the output loss will be around 42kt or so in September, taking up 14% of the total output in September. The number of production lines in shutdown was 21, occupying 10% of the total in China.
September BOPET Production Lines in Shutdown
As for the region, 95% of the capacity in the shutdown was concentrated in East China, accounting for 17% of the total capacity in East China. 5% of the capacity in the shutdown was concentrated in North China, accounting for about 5% of the total capacity in North China. As for the production structure, 89% of the capacity in the shutdown was concentrated on general-purpose products, and 11% of the capacity in the shutdown was concentrated on differentiated products.
Overall, the shutdown of BOPET production lines was concentrated in September. Compared to June, demand improved this time. The inventory pressure on producers was alleviated. Downstream plants reflected that the demand improved in H1 September, and the operating rate was maintained at 40%-60%. As for orders, the overall order level was at 15 days’ worth. As for inventory, the inventory started to drop in August and was still on the downtrend in September. It is predicted that the inventory will drop to 10 days’ worth by late September.
In September, the overall imbalance between supply and demand was eased somewhat, and the prices stopped falling and rebounded. In H2 of September, the low-end offers decreased but the transactions at high-end prices turned weak. In the coming period, with the production lines restarting and the commissioning of new production lines, the BOPET market supply may increase. On the demand side, demand from most downstream fields tends to be stable. By late September, users are expected to replenish stocks. As for profits, the current profit was RMB -500/mt, so producers are not likely to lower the price continuously.
Overall, the BOPET prices are likely to stabilize in the short run. Prices of general 12μ BOPET are expected to fluctuate around RMB 8,510/mt or so.
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