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Insight | Time:Apr 21 2017 3:52PM
PET bottle chip to breach 7000 in April ?
 
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Till Apr 19th, China PET bottle chip value has shed 16-17% from post-holiday high of 8500yuan/mt. Meanwhile, the tumbling oil and weaker commodities markets co-worked to drive down polyester feedstock, PET bottle chip price seems likely to breach below 7000yuan/mt. Let’s see how slim the chance is.

Some beverage plants have slightly revised down O/R near end Mar and early Apr after covering their retail paths. They are waiting for retailers’ feedback to readjust running rate. Hence PET bottle chip factory stock level gradually piled up in the first half of Apr after O/R raise, with few registering 5-7 days rise within short term. Later, if beverage and edible-oil plants delay refilling, PET resin producers may feel larger sales and delivery pressure. In this regard, though demand gets bolstered later on, factory may face tighter delivery schedule. On one flip, downstream players dare not build too much stock, as PET resin price is in down cycle; on the other, buy choice will increase if new capacity starts up as planned.

PET resin sales may not lame shortly despite climbing stock. According to CCFGroup statistics, PET bottle chip factory order intake generally extends to mid-late May, while delivery of some plant has been arranged to early-mid Jun. Export order intake in Feb-Mar both surpassed 200kt and fared tolerable in H1 Apr, hence export delivery in Q2 may also prop up domestic sales.

Besides, the rapidly falling feedstock offers PET resin plants more cash flow. Some traders that sold earlier have already gained profit. But the arbitrage spread may be soon filled up as PET resin value is to decline after continually dipping crude oil and raw materials. That partly explains why some small-medium sized traders suspended trading and retreated to sidelines, which reflects abating trading sentiment.


PET bottle chip anti-dumping cases are worth concerns since China’s export dependency reaches 30%. Japan and Indonesia together soak up nearly 1/3 of China’s exports, and if both of them announce affirmative anti-dumping results, China PET bottle chip producers may suffer serious setback before opening the E.U. market. Indonesia now imposes 5% temporarily import tariff on Chinese PET resin while Japan is investigating and is likely to collect ADD on Chinese materials.

Country Incident
E.U. Nov 2010, European Commission ruled to impose 5-year long ADD toward Chinese PET chip. Only one enterprise in Changzhou was free of this duty. All the other Chinese producers will face ADD of euro 22-184/mt. Nov 13th 2015, Europe set up a second Sunset Review (SSR) of anti-dumping investigation toward Chinese PET chip. In Dec 2016, European Commission concluded that anti-dumping measures toward China PET shall terminate.?
The European Commission lifted anti-dumping measures applied to imports of PET?originating in the PRC on Feb 6 2017, and resumed 6.5% import tariff at the same time.
Indonesia August 22nd 2016, the Indonesian Anti-Dumping Committee (KADI) has initiated anti-dumping investigation on imported Polyethylene Terephthalate (PET) originated from Malaysia, Rep. of Korea, and People’s Rep. of China. 5% temporary import tariff was imposed since Mar 2017.
Argentina Oct 2013, Argentina imposed 8% ADD toward PET bottle chip imported from Asia.
 
Argentina announced on Apr 4th to start anti-dumping review toward PET (viscosity between 0.7dl/g and 0.86dl/g) imported from South Korea, China, China Taiwan, India and Thailand.
Turkey Jul 8th 2014, Turkey government announced to impose 7% extra tariff on imported PET.
Egypt On Aug 16th 2016, Egyptian Ministry of Trade and Industry terminated investigation toward safeguard measures on imported PET resin as petitioner rescinded its request.
U.S. On Mar 7th 2016, the United States International Trade Commission (USITC) determined that U.S. industry is materially injured by polyethylene terephthalate (PET) resin imported from Canada, China, India, and Oman and rule to collect ADD toward PET imports from above countries and CVD on Chinese and Indian materials.
 
Detailed ADD is as below:
http://www.ccfgroup.com/newscenter/newsview.php?Class_ID=600000&Info_ID=20160512054
 
Detailed CVD is in below link:
http://www.ccfgroup.com/newscenter/newsview.php?Class_ID=600000&Info_ID=20160512054
Malaysia Jun 2015, Ministry of Finance Malaysia issued an order that they will impose anti-dumping duties on PET resin imported from China, Indonesia and South Korea for as long as 5 years, validity from Mar 14th 2015 to Mar 13th 2020. Tax rate imposed to 6 Chinese producers was between 4.26%-14.91%.
 
Detailed ADD is in below link:
http://www.ccfgroup.com/newscenter/newsview.php?Class_ID=600000&Info_ID=20150701041
Brazil June 22nd 2015, Brazilian Ministry of Development, Industry and Foreign Commerce (MDIC) started anti-dumping investigation toward PET resin imported from China, India, Indonesia and China Taiwan. Tax code of involved product in South American Common Market is 39076000. The appealing enterprise is M&G Polímeros.
 
MDIC and Secretariat of Foreign Trade (SECEX) issued NO. 21 notification on Apr 6th 2016 announcing that they determined to prolong investigating time of PET resin dumping activities by China, China Taiwan, India and Indonesia, viscosity between 0.70 ~ 0.88 dl/g. 8 months at maximum starting from Apr 22nd.
 
In Nov, Brazil MDIC ruled PET resin (viscosity within 0.70 ~ 0.88 dl/g) dumping activities by China mainland, China Taiwan, India and Indonesia affirmative. ADD levy began on Nov 28th and will last for 5 years.
Japan Around end Sep 2016, Ministry of Economy, Trade and Industry of Japan began anti-dumping investigation toward PET imported from China (viscosity above 0.7). The petition was filed by Mitsui Chemicals, Mitsubishi Chemical and UNI PET on Sep 6th. Japanese investigation team arrived in China in Apr for survey.


PET bottle chip factories mainly focused on delivery recently and new order intakes was mediocre. Factory stock level won’t accumulate much shortly but concerns toward market outlook raises. For producers, amid waning up and downstream, lower prices for promotion is perfectly fine. Whether in Apr to breach 7000 waits for game between producers and downstream plants. If rigid demand shows in advance later on, chances are bigger for PET resin to stabilize at bottom, vice versa. Besides, if feedstock tumbled, below 7 will materialize ahead of time.
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