China PET Bottle Chip Prices Fluctuate in July—Surging, Falling Back, and Rebounding at Month-End

I. Three-Phase Price direction in July (East China Mainstream Spot + Main Bottle Chip Futures Contract "PR")

Phase 1: Early July (1st–15th): Oscillating upward from a low base; slight rebound.

Opening: Spot prices started at 6,550–6,650 RMB/ton; the main futures contract hovered around 6,570 RMB/ton.

Drivers of the rise: Geopolitical conflicts in the Middle East drove up international crude oil prices; PTA and ethylene glycol strengthened in tandem, raising PET production costs. Additionally, prices were low following a sustained slump in June; downstream preform and beverage companies engaged in sporadic restocking based on immediate needs, prompting factories to raise quotes—resulting in small daily increases of 50–100 RMB/ton. Peak of this stage: Prices surged to 7,150–7,250 RMB/ton in mid-July, with futures peaking at 7,394 RMB/ton.

Constraints: Multiple new and restarted bottle chip production units came online (totaling 1.65 million tons of capacity from Sanfangxiang, Fuhai, Hanjiang, etc.), leading to a continuous surge in supply. Meanwhile, end-user beverage companies had already locked in prices and stocked up on third-quarter raw materials during the second quarter; their willingness to purchase at higher prices was extremely low, resulting in a market characterized by "quoted prices however no actual trading."

Phase 2: Mid-to-late July (16th–28th) – Precipitous drop; the month's lowest point reached.

Trigger: Geopolitical tensions in the Middle East eased, causing international crude oil prices to retreat sharply; cost support from upstream PTA and ethylene glycol collapsed, prompting long-position funds to exit and lock in profits. Extreme decline: July 27th saw the month's steepest drop, with PET bottle chip futures plunging 390 RMB/tonne (5.22%) in a single day to a low of 7,034 RMB/tonne; spot prices fell in tandem, with mainstream trading levels dropping below 7,200 RMB/tonne and lows touching the 7,000 mark.

Cost-side factors weakened across the board, offering no support.

sector operating rates remained high at 78%–89%, resulting in ample supply.

Domestic beverage consumption was at the tail end of the off-season; June beverage production fell 3.2% year-on-year, and packaging demand remained sluggish. Export orders also shrank, with June bottle chip exports down 7.1% year-on-year as overseas buyers adopted a wait-and-see approach.

Factory inventories saw a slight buildup, with available stock rising to 8.78 days; pressure to move inventory forced price cuts and promotional sales.

Phase 3: End of July (29th–31st) – Rebound from oversold levels; prices recover.

Market panic following the sharp drop subsided; crude oil prices stabilized slightly, and low prices stimulated downstream buyers to "bottom-aquatic species" and restock, leading to a technical market correction:

Futures surged to two consecutive days (up 2.22% on the 29th and 3.32% on the 30th), closing at 7,462 RMB/tonne on the 30th.

Spot prices rebounded to 7,350–7,460 RMB/tonne, with substantial/prolonged orders referencing 7,250 RMB/tonne; export prices (FOB Shanghai) recovered to 990–1,020 USD/tonne.

The month ended at a relatively high level, though prices did not fully recover the losses incurred earlier in the month. II. Key Drivers of Market Fluctuations in July

(I) Bullish Factors Supporting Price Increases (efficiently in the Short Term)

Fluctuations in crude oil costs were the primary driver.

Market trends throughout the month closely tracked international crude oil movements: early in the month, oil prices surged due to geopolitical conflicts, driving a broad rally across the PET supply chain; mid-to-late month, a sharp drop in oil prices caused the entire chain to decline; and at month-end, a stabilization in oil prices prompted a market recovery. Supply-demand dynamics specific to PET bottle chips themselves were insufficient to dictate the direction. Periodic plant maintenance slightly tightened supply.

immediate maintenance shutdowns at select vegetation briefly eased supply pressure; combined with essential restocking at low price points, this triggered a minor market rebound.

(II) Bearish Factors Pressuring Prices Downward (prolonged Fundamental Drivers)

Concentrated discharge of new capacity and persistent supply surplus.

Multiple extensive new production units came online and idle facilities restarted in July, causing total domestic PET bottle chip supply to climb steadily. The sector's oversupply pattern became entrenched, keeping processing margins consistently thin (averaging less than 50 RMB/ton to the month) and severely limiting room to price increases.

Lackluster peak-season demand and strictly essential procurement.

The traditional summer peak season to beverages failed to materialize strongly; consumer demand to drinks remained weak. Major manufacturers of bottled aquatic environments, beverages, and edible oils adopted a "just-in-time" purchasing strategy, refusing to stockpile or chase rising prices. With ample low-cost inventory secured earlier, "bottom-fishing" occurred only after sharp price drops, failing to generate sustained procurement support.

Weakness in both domestic and overseas demand.

Sluggish domestic consumption combined with cooling overseas demand led to a decline in export orders. A backlog of inventory intended to the domestic market forced factories to rely on price cuts to clear stock.

Cautious market sentiment and heightened evaporative environment.

Following the wild price swings in the PET market during the first half of the year, traders and downstream companies adopted conservative trading strategies. A reluctance to chase rising prices and a tendency toward panic selling during downturns amplified the magnitude of price fluctuations throughout the month. III. Review of Upstream and Downstream Data

Upstream Raw Materials (Cost Side)

Prices to PTA and ethylene glycol surged and then fell back in July, closing the month reduce; the composite production cost to PET rose initially before declining, with the cost baseline shifting downward by month-end.

Supply Side: The average monthly operating rate was 76%–78%, with production volume rising month-on-month; plant inventories saw a slight accumulation however remained in the low-to-moderate range, with no extensive destocking activity.

Demand Side: Domestic beverage production operating rates stood at 80%–90%, though shipments of finished goods slowed; preform plant operating rates fluctuated in line with raw material prices; exports continued to show negative development.

Recycled PET Flakes

Prices moved in tandem with virgin material, trading within the 5,400–5,650 RMB/tonne range, though with less evaporative environment than virgin flakes.

IV. Month-End Summary & immediate Outlook to August

July Summary

In July, PET PET chip prices experienced wide fluctuations driven primarily by costs; supply-demand fundamentals remained weak throughout the month. Price rallies were driven by short-lived positive impulses from crude oil, while declines reflected the underlying oversupply. The average monthly spot price was approximately 7,080 RMB/tonne, a slight decrease from June.

August Outlook

Market Tone: Continued wide fluctuations tracking crude oil, with an overall weak direction.

Upside Resistance: Ongoing capacity expansion and waning demand as the peak season to end-consumption items draws to a close leave no basis to a significant price surge.

Downside Support: Low prices will continue to trigger downstream restocking, limiting the scope to a sharp decline.

Projected Price Range: Spot prices expected to fluctuate between 7,100 and 7,550 RMB/tonne; futures prices between 7,200 and 7,600 RMB/tonne.

Key Indicators to Watch: International crude oil trends, monthly tender prices from major beverage manufacturers, and the implementation of maintenance schedules to domestic PET chip production facilities.