BOPET Market Seeks Opportunity to Increase

BOPET Market Seeks Opportunity to Increase

Preface

In July, suppressed by the sluggish demand and cost, the BOPET market dropped from a high level after surging in June. The price of 12μ general-purpose BOPET in East China dropped to RMB 11,310/mt from the highest RMB 13,010/mt, down 13.07% or RMB 1,700/mt M-O-M. The price kept decreasing, but the feedstock price increased, keeping up with the cost price. The demand from the soft bag industry entered the peak season. The BOPET market will improve if get strong support.

According to the statistics from SCI, in H1, 2019, the BOPET price trend was basically in line with that in H1, 2018. In late June, the rising range of the BOPET market in late June was RMB 2,000/mt, which was same as that in H2 July, 2018. The downstream BOPET enterprises started to reduce their output under high-cost pressure, leading to sluggish demand. The operating rate of the PTA enterprises reached nearly 100%, due to the high profit, and the feedstock price was in the downtrend under the prominent supply-demand contradiction. However, the process cost of the BOPET market was relatively high, maintaining RMB 4,000/mt, and the process cost was in the downtrend following the decreasing offers under the pressure from the slumping feedstock price. At present, the BOPET market prices were RMB 11,210-11,410/mt, and the prices given by customers was RMB 11,010-11,110/mt, down RMB 13,110/mt or 13.73% compared with the price of RMB 13,110/mt in 2018. The profit was RMB 2,972/mt, up 42.54% compared with the profit of RMB 2,085/mt in 2018.

At the beginning of July, the Sino-U.S. relation tended optimistic at the G20 Summit, which boosted the market. Without strong support to the feedstock side, the market was amid a bearish atmosphere. At present, the operating rate of the PTA industry maintains 93.53%, and the downstream BOPET enterprises keep reducing their output, with the operating rate maintaining 84.33%. Under the prominent supply-demand contradiction, it will be hard for the feedstock price to surge.

There was almost no unit under maintenance at the BOPET enterprises, and the operating rate maintained 78%. The process cost of the BOPET enterprises was RMB 4,000/mt. In general, the BOPET market will be in the downtrend in the short run. Some PTA units are likely to shut down for maintenance, and the PTA futures price will rebound supported by the long-time decreasing technical side. As the demand will enter the peak season in the Mid-Autumn Festival and the National Day, the downstream players will gradually show buying interest, and the demand will increase in the short run if get support from the feedstock side.

In general, SCI estimates that the BOPET market will fluctuate weakly in the short run. The price of 12μ general-purpose BOPET in East China will gradually drop to RMB 11,010/mt. Attention should be paid to the profit of the PTA enterprises, units under maintenance and the futures market.

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