PET Bottle Chips Price Review and After Market Outlook
Author: Jul 22, 2011 10:24
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Ⅰ.Summery for the first half of year
1.First half of year PET bottle chips price trend review and influential factors analysis.
Pricture 1 2011/1-6 PET bottle chips price trend graph
 In the first half of 2011, the global financial market is complex and changeable, crude oil and bulk goods price greatly oscillated. Excess liquidity and monetary policy had caused a lot of influence to the commodity market. Influenced by which, polyester price show a notably fluctuate trend. In the first half of year, the market price showed the trend of fist up and then down. PET bottle chips quotation in China from Jan to Jun is averagely around 13230CNY/t(cash take and EXW),quotation out abroad is averagely around $1720/t (FOB China port). The highest quotation in China was in early March, while the highest quotation out abroad was in later March.
In the first quarter, with the boost of crude oil price and its short supply problem, PX price jumped up greatly and PET bottle chips price is boosted up. In early March, PET bottle chips price increased to 14300-14600CNY/t, hit the peak of the first half of year. PET trade volume continue to increase, which kept a high turns out of 100 thousand ton per month after March, domestic market demand also kept stable. Therefore in the first quarter, PET bottle chips plants turn loss into gains after March.
In the second quarter, the state monetary tightening policy come into effect. Deposit reserve rate was increased month by month. PTA profit margin narrowed down, fluctuating downward and by the end of July, it had dropped to 12000CNY/t.
2.PET bottle chips production situation analysis
In 2011, the newly PET production capacity is concentrated in the second half of year. During the first half, there is no new production capacity put into operation. By the end of June 2011, PET bottle chips production capacity is still 5510thousand ton per year, and effective production capacity is 5020thousand ton per year. With the stable demand from both in and out abroad, PET plants’ operation rate is relatively high. The total production amount reached 1886 thousand ton, increased 265 thousand ton.
Table 1 2011/1-6 PET bottle chips device load &production statistics (unit: ten thousand ton)
3.PET bottle chips import and export situation analysis
PET bottle chips exportation increased a lot in 2011. From Jan to May, the total turn out is 410 thousand ton. Increased 111 thousand ton, year on year compare, and the increase amount is 37.1%, export declaration average price is $1689/t, which increased $453/t. Since March, the monthly exportation kept around 100 thousand ton for one aspect, the global PET market demand further recovered, and another aspect, European PET device often broke down, resulting PET supply in European area short situation.
Table 2 2011/1-5 PET bottle chips import and export amount and price (unit: ten thousand ton, dollar/ton)
Picture 2 2009-2011/1-12 PET bottle chips export amount contrast
 4. PET bottle chips profit margin analysis
For a long time, PET bottle chips, for its specialty, is independent in the polyester fiber market. For its end product seasonal factor, slack season and busy season differentials a lot. Its goods prepare cycle is relative long, which needs one or two months while poly fiber goods prepare cycle just needs 7-10 days. Some major plants like Coke, Pepsi cola delivery lead time will be a season in advance. For this reason, PET bottle chip plants will predict its price in the near future while take in a big order. Once the cost jumped up, while the order price stays low, a bottle chip plants will suffer a great loss.
On the other hand, see from cost transference, chemical fiber industry is bigger than PET bottle chips industry. When PET bottle chips price increased 1000 CNY, on the base of 500ml bottle base, it transferred 0.14CNY cost pressure，and this 0.14CNY cost will transfer again to consumers, and if drink price is not increased, then this 0.14CNY cost will be undertaken by bottle plants or drink plants. But now, such a cost is passively undertaken by PET bottle chips plants.
Picture 3 2011/1-6 PET bottle chips contract and cost/profit contrast map (unit: CNY/t)
 Picuture 4 2011/1-6 PET bottle chips cash flow profit figure
 Ⅱ. Second half of year outlook
The third quarter, the macro policy will be eased. But for the new device put into operation, PTA production is expected to increase, and its price is hard to jump high. Moreover, with the coming of summer season load shedding program and the coming of textile slack season, the aftermarket still need to be treated with caution.
The fourth quarter, with the newly 200thousand ton production capacity come into the market, PET bottle chips over supply situation will be further aggravated. PET bottle chips price will fluctuate generally. Suppliers are suggested to reduce the stock while the price is high.
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Editor: Candy From: 168Tex.com
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