OPEC and Russia negotiated last Friday and were unable to reach an agreement to further reduce production by 1.5 million barrels per day, causing international oil prices to plummet. PTA and ethylene glycol futures hit the limit at the opening on Monday, cost-side support collapsed, the polyester bottle flake market fell into panic, and quotations fell off a cliff.
PTA/MEG East China market price trend chart
Affected by the plunge in crude oil, PTA and MEG futures opened at the limit as expected by the market. The cost side has collapsed, and the price of polyester products has been reduced accordingly by 200-300 yuan/ton.
With terminal demand yet to return to normal, the market for polyester bottle flakes has undoubtedly worsened. Polyester bottle flakes have always been a cost-driven product. Due to the impact of public health events, domestic demand this year has been significantly reduced compared to previous years, resulting in high inventories of bottle flake manufacturers. During the Spring Festival, some manufacturers’ inventories were as high as more than 40 days. Under the pressure of high inventory, the bottle flake industry has reduced production and burden to alleviate the dilemma of poor shipments and continuous increase in inventory.
The industry’s operating rate dropped from 73.57% on the last working day before the Spring Festival to 59.60%. With the development of domestic public health incidents relatively stable, and encouraged by the resumption of work and production policies, bottle flake processing companies and soft drink companies have slowly resumed operations, and bottle flake manufacturers have gradually recovered their shipments, which has alleviated inventory pressure to a certain extent. As of March 9, the start-up of the bottle tablet industry increased by 64.50%.
Polyester bottle flakes market price trend chart in East China
In the morning, after PTA and MEG fell to the limit, polyester bottle flake manufacturers lowered their quotations by 200-300 yuan/ton, and some individuals did not sign orders for the time being. There are few bids in the market, and no real orders have been heard yet. As of 11:30 a.m. on March 9, the East China market for polyester bottle flakes was estimated to be around 5,800 yuan/ton. Due to the fear of falling downstream, bids were scarce. The market sentiment is a bit panicky, so please wait and see with caution. It is obvious from the above figure that in early 2016, the price of bottle flakes in East China dropped to 5,700 yuan/ton. The reason is that the price of bottle flakes has been affected by the raw material PTA. The industry is worried that crude oil continues to fall, and the price of bottle flakes may fall below the lowest point in 2016.
Polyester bottle flakes are driven by the raw material side, and PTA continues to accumulate inventory, so the price still has room to fall. I heard that the price was at 3,700 yuan/ton in the morning. Due to the cost drag, the price of polyester bottle flakes is likely to fall below 5,700 yuan/ton. At present, the overall inventory of bottle flakes is about 18 days, and the start-up of major downstream soft drink companies still needs to be improved. Under the influence of weak downstream demand, polyester bottle flakes cannot escape the weak situation in the short term. </p
