Bottle Grade PET Chips: The Industry Witnessed an Increased Device Maintenance, and Its Operation Falling to a New Low

Bottle Grade PET Chips: The Industry Witnessed an Increased Device Maintenance, and Its Operation Falling to a New Low

Introduction: Since the second half of this year, domestic bottle grade polyester chips have been in a loss situation. After September, the domestic polyester raw material market saw a continuous high rise, but the resistance of the bottle grade polyester chips market to keep up with the rise is great. So the processing costs of enterprises have continued to decrease, forcing increasing number of enterprises to reduce production.

Since the beginning of the second half of this year, domestic bottle grade polyester chips enterprises have been continuously in a state of loss in production. From July until mid September, the PTA of polyester raw materials continued to fluctuate and rise, and the ethylene glycol market fluctuated strongly. The production cost pressure of bottle grade polyester chips enterprises continued to increase, and the bottle grade polyester chips market was dragged down by the weak supply and demand side, with significant resistance to market expansion. The growth of the bottle grade polyester chips market was far less than that of the raw material market. Therefore, the overall profit space of domestic bottle grade polyester chips enterprises was significantly compressed, and the production losses of bottle grade polyester chips enterprises intensified. By mid September, the lowest profit for bottle grade polyester chips enterprises had dropped to a low level of -407 yuan/ton. Since late September, with the pullback of the polyester raw material PTA and ethylene glycol market, the production cost pressure of bottle grade polyester chips enterprises has decreased, resulting in a slight reduction in the company's loss situation, but it is still difficult to get rid of the loss situation. Throughout the second half of the year, the average production profit of bottle grade polyester chips enterprises was -181 yuan/ton.

The main reason for the long-term losses in the production of bottle grade polyester chips enterprises in the second half of this year is the massive investment of new production capacity. In the first three quarters of this year, the new production capacity of domestic bottle grade polyester chips enterprises has reached 4 million tons, with a growth rate of 32.32%. The total production capacity of domestic bottle grade polyester chips enterprises has reached 16.37 million tons. The spot resources in the market are becoming loose, and domestic sales pressure is increasing. However, domestic terminal demand continues to be weak. In addition, downstream enterprises lack confidence in the future market, have low purchasing enthusiasm, and the supply and demand side of the market has weakened. Therefore, the bottle grade polyester chips market has been fluctuating in a low range for a long time, making it difficult for enterprises to significantly improve their profitability.

Under the pressure of low processing costs, the production enthusiasm of domestic bottle grade polyester chips enterprises has decreased. Since September, bottle grade polyester chips enterprises have gradually reduced or shutdown production devices. A set of 150000 ton unit in Anhua was shut down on September 18th; A set of 150000 ton Yizheng Chemical Fiber plant was converted to produce chips on September 15th; The Shanghai Yuanfang Small Line Plant began to switch to produce chips in October; In late September, the 700000 ton plant in Sanfang Lane was shut down; A 600000 ton unit in China Resources Jiangyin was shut down for maintenance in early October. At present, the construction of domestic bottle grade polyester chips enterprises will decrease to a low level of 75%. Although the market supply has significantly decreased, with the cooling of the weather, the peak demand season for domestic bottle grade polyester chips is coming to an end, and the market demand will gradually decrease, as the domestic bottle grade polyester chips industry enters a state of dual decline of supply and demand.

Recently, international crude oil has maintained a high level, and the polyester raw material market remains high. Under high cost pressure, the bottle grade polyester chips market may maintain a consolidation pattern, but the supply and demand side of the market has weakened. Therefore, the domestic bottle grade polyester chips market will still face significant pressure in the future, and the production profit of enterprises will be difficult to show signs of improvement. Therefore, in the short term, enterprise operation and construction level will remain low.