BOPET Price may Trend Down
The BOPET prices fluctuated downward after the National Day holiday. Amid the pressure of increasing supply and weakening demand, how will the BOPET market perform?
BOPET price seemed hard to reverse the downtrend
The BOPET market slightly increased in early October, driven by the cost. Afterward, the BOPET prices entered a downtrend, impacted by decreasing feedstock prices, softening demand, diminishing orders and other factors. Taking 12μ in East China as an example, the price was RMB 8,685/mt in early October but dropped to RMB 8,060/mt by December 7, down RMB 625/mt or 7.20%.
As of December 7, negotiation prices for general-purpose 12μ BOPET in East China were RMB 7,910-8,210/mt, stable from the previous trading day, down RMB 400/mt from last month and down RMB 2,600/mt from last year. Offers for hot stamping film were about RMB 8,500-8,800/mt; those for 6μBOPET in North China were around RMB 9,400-9,700/mt; those for 20μ-75μ printing film were around RMB 7,810-8,210/mt; those for substrate, which is used for release film and protective film, were around RMB 9,300-9,600/mt.
Order cycle contracted
The crude oil prices rose more than expected during the National Day holiday. Following the uptrend in the feedstock market, BOPET prices moved upward. Downstream users replenished stocks intensively, so the order level at producers extended to 18.14 days, reaching a half-year high. Afterward, the BOPET prices dropped with feedstock prices going down and demand turning soft. Downstream users were unwilling to stockpile in large amounts and mainly digest the previous inventories. With time passing by, the overall order level contracted by half. According to the 14 sample enterprises, the overall order level was 8.57 days by late November, down 9.57 days from the previous highs.
Cost fell from highs
The crude oil price dropped after the holiday, dragging down the prices in the downstream markets. Thus, the cost of BOPET production also went down. Overall, the cost dropped from RMB 6,978/mt in early October to RMB 5,743/mt, down RMB 1,235/mt or 17.70%. In the coming period, newly added PTA units are planned to be put into use, and the supply of MEG is ample. However, the output at downstream plants may be cut down. The cost side may not lend positive support to the BOPET market.
Profit recovers recently but may continue to move down in the coming period
After the holiday, the decline in BOPET price was not as large as that in the feedstock market, so the inventory recovered slowly. Entering November, the profit fluctuated between RMB -50/mt and RMB 50/mt. Though the profit was negative sometimes, it rose notably compared with the previous stages.
Supply is expected to increase
According to SCI, 7 production lines will be restarted in December. 4 plants will put new units into operation. It is predicted that the output will be 331.9kt in December, up 21.1kt from that in November.
The supply of BOPET may continue to rise, while the downstream demand seems hard to improve, presenting intensified imbalance between supply and demand. SCI holds that the price may trend downward before the Spring Festival holiday. However, users may stock up as the holiday draws near.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
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