From：Join High (Xiamen) Fiber Tech Co., LTD Release time：2018-07-27
PET bottle chip price gradually stabilized at 9100-9200yuan/mt late Jul after rapid fall in the first half month. Some players still sell short at slightly below 9000yuan/mt, but bearish views are reducing.
This round of stabilizing is based on tolerable fundamental. On one side, capacity expansion delayed, hence supply increased is limited. On the other, launched capacity could be offset by plants closure. Meanwhile, Jul delivery is typically massive in China. Factory stock level largely stays at 10-15 days, even so, some specs saw tightness. With PET values gradually retreating to low place, large beverage or edible plants come out to build stock, generally around half month. Till last weekend, the volume totaled around 100kt. Players’ sentiment turned more prudent. PET resin price though moved to stabilized, upside is also difficult.
Figure 1. PET bottle chip operating status in overseas market:
|Middle East||Octal||750||Restarted, including 250kt PET film and 500kt/year PET bottle chip|
|U.S.||Apple Grove||360||M&G'360kt/year line is resuming|
|Vetnam||Far Easten||400||End Jul|
|Egypt||EIPET||540||Restart delays to Aug|
|China||Chengxing||600||Materials are available recently and quality is lifting|
Based on above figure, global incremental supply is assessed around 3800-4000mt/day before end Jul, equivalent to 1.4-1.5 million tons unit.
But a PTA unit in Mexico was on fire, forcing down downstream PET resin line, hence enquiry from America began to emerge. Local PET resin line totaled 1.2 million tons, if PTA unit didn't resume before Q4, a supply deficit will be around 100kt per month. Mexico and U.S. are the major sufferers. So far, order has been arranged to Aug-Sep in S.E. and N.E. Asia, India also to end Aug-early Sep, hence American supply shortage may primarily be filled by China mainland. Besides, rumors were heard that South Africa based Hosaf was shut down again. If this is true, then global newly increased supply and reduced supply is in a dynamic balance.
Since RMB depreciated substantially against USD and China domestic polyester feedstock cost is rising, shortly, PET bottle chip price may fare stable-to-strong, but export price may inch lower. In medium-long run, capacity expansion is intensive in Q3, we still hold soft views.