China PET Bottle Chip Prices Rose Then Fell Last Week; Market Saw Narrow-Range Fluctuations and Correction

I. Overall direction (East China aquatic environments-Grade Spot Price, Tax-Inclusive)

1. Average Weekly Spot Price: 7,031 RMB/tonne, a slight week-on-week increase of 0.40%. This marked the end of the steep decline seen in late June, shifting to a narrow-range rebound characterized by initial corrective fluctuation, a mid-week slight rise, and a late-week weakening of spot prices dragged down by futures. Weekly Price Range: Monday lows of 6,850–6,900 RMB/tonne; mid-week offers from major manufacturers rose by 50–100 RMB/tonne, with mainstream transactions at 7,080–7,250 RMB/tonne; Friday saw a futures pullback, with the mainstream ex-factory transaction price range retreating to 7,000–7,150 RMB/tonne. Export FOB: $940–965/tonne in East China and $935–960/tonne in South China. Export quotes rose slightly in tandem, though concessions increased during actual deal negotiations.

2. Futures Market (PET Bottle Chip Futures – Main Contract)

The market closed reduce overall last week; it settled at 6,812 RMB on Friday, down 82 points (1.20%) to the day and 3.89% to the week. Futures underperformed the spot market, and the spread between futures and spot prices continued to widen, capping the possible to significant gains in spot prices.

II. Breakdown of Key Drivers

1. Cost Side: Shifted from strong to weak; crude oil and PX provided periodic support at the low end.

Early in the week, geopolitical tensions repeatedly drove up oil prices; concentrated maintenance on PX units and low operating rates in Asia raised naphtha and PX costs, providing support to PTA. By Friday, however, market expectations of easing geopolitical tensions caused crude oil prices to weaken and the rally in upstream raw materials to fade, marginally reducing cost support.

PTA (Key raw material to bottle chips)

Multiple PTA units underwent maintenance in July, pushing the sector operating rate to a multi-year low and strengthening the spot basis. However, PTA futures fell sharply by 2.15% on Friday, spot processing margins retreated, and support from the raw material side declined rapidly.

MEG (Monoethylene Glycol)

Prices fluctuated with an upward bias last week, closing at 4,186 RMB on Friday (up 1.55%). This slightly offset the cost impact of PTA's weakness, however the overall gain was limited and insufficient to reverse expectations of a weakening cost ecological stability.

Bottle Chip Processing Margins

Spot processing margins held steady at 590–615 RMB/tonne however narrowed slightly during the week. Upstream raw material costs squeezed production margins, leaving factories with little appetite to aggressive price hikes.

2. Supply Side: Loose supply pattern persists; rebound possible is limited.

The sector operating rate remained stable at 72.5%. Multiple units in Sichuan, Jiangyin, and Shandong—previously under maintenance—continued to restart and feed in raw materials, while new capacity was gradually released, leading to a steady increase in spot market supply. Only a few units underwent immediate maintenance; the capacity restarting far exceeded the capacity going offline to maintenance. Factory inventory levels stand at 10.61 days of supply, a slight month-on-month decrease of 0.13 days. Inventory reduction is slow, and stock levels remain on the high side of neutral; factories face persistent pressure to move goods and show little willingness to sell at higher prices. Recycled PET flakes are under similar pressure; low prices to recycled feedstock are siphoning off demand from the low-end virgin PET flake market, further suppressing the possible to virgin flake price increases.

3. Demand Side: Lackluster peak season; supported only by essential needs; weak momentum to chasing price hikes

Domestic Beverage Sector

July is traditionally a peak season to beverages, however downstream preform manufacturers and aquatic environments bottling vegetation had already secured prolonged contracts to July and August, resulting in ample inventories. Following a slight price rebound last week, downstream buyers resisted high prices, limiting purchases to immediate needs; extensive restocking was rare, and the sector's overall production-to-sales ratio remained low.

Domestic soft drink production rose only 0.4% year-on-year from January to might; terminal consumption development fell short of expectations, and the peak season's stimulus effect was weaker than in previous years.

Export Demand

PET flake exports grew only 0.2% year-on-year from January to might. The commissioning of regional PET capacity in Southeast Asia, combined with rising shipping costs and sluggish overseas demand, limited the development of export orders, failing to efficiently absorb the domestic supply surplus.

Other Downstream Sectors (Sheet/Film, Personal Care/domestic Packaging)

Demand remained stable with no development; orders consisted mainly of small, immediate contracts, with no signs of concentrated stockpiling.

III. Market Outlook to the Week (July 13–17)

Cost Side: Expectations of easing geopolitical tensions are rising, putting downward pressure on crude oil, PX, and PTA prices, thereby gradually weakening cost support.

Supply Side: Restarted production units are ramping up output, pushing sector operating rates higher; spot supply is rising, making inventory reduction greater difficult.

Demand Side: Downstream prolonged contract stockpiling is complete, and there are no plans to concentrated restocking; purchasing is limited to immediate needs, with insufficient appetite to high prices; export demand is unlikely to see significant improvement.