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Insight | Time:Apr 20 2018 4:12PM
The off-the-shelf PET resin futures gradually emerging.
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PET resin price surged all the way up recently, boosted by supportive demand, tight supply as well as rising feedstock. Cash flow also marched to 10-year high. Most producers have begun to sell May-Jun orders, some even take in Jul-Aug deals. Traders with stock built previously generally raised prices for end Apr and early May cargoes to 10000yuan/mt plus, but delivery is still uncertain, depending on factor arrangement. As a result, offers for Apr-Aug materials emerge, which is similar to PTA futures’ major contract discussion. The off-the-shelf PET futures are gradually emerging.

In fact, from the early days when the deposit sales model appeared, PET bottle chip already had a tradition of selling near-term and forward goods together, especially during the peak season. On one hand, China’s downstream, mainly leading beverage plants, usually consume substantial number of PET chip at one time, and it’s a bit pressing to purchase on need factoring in time required for transportation. Downstream producers typically build stock one month ahead or even earlier considering price fluctuations (though some buyers turned more prudent in purchasing in past years since PET price continuously fell and some also bought spot materials on weekly basis). On the other hand, exports account for about 30% of total demand and the figure is sometimes even higher. Foreign players also incline to secure materials in advance to guarantee production concerning shipping date, exchange rate fluctuation and shipping fees.

Experiencing years of minor loss or thin profit, PET resin industry weeded out some capacity and downstream capacity expanded. The product’s position in the industry chain is enhancing.

Traders that are used to cost-oriented mode now have to adapt to sales pressure transferred from PET resin producers (cost-oriented mode is because most traders are accustomed to the single spot trading mode). Though it’s lucrative now for traders with stock build, their operation will turn more cautious later on.

Industry reshuffle may continue along with power shifting as supply demand pattern changes. Current PET resin market is alike the early PTA industry: highly concentrated capacity and follow up downstream capacity, requirement on traders improves regarding price trend judge. Meanwhile, share may lift for downstream large plants to sign contract with PET resin producers.

A new survey report is around the corner: Profit Model & Investment Prospect Analysis Report of Bottle Grade PET Chips. Stay tuned! Detailed info: please contact market@ccfgroup.com.

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