Views:6 Author:Site Editor Publish Time: 2019-01-18 Origin:Site
PET bottle chip showed two rounds of hike in 2018, overall presenting an “M” shape. According to CCFGroup statistics, water bottle chip price in E. China averaged at 9374.8yuan/mt throughout 2018, and export value averaged at $1234.5/mt FOB Shanghai, respectively up 21% and 55%.
Supply: capacity expansion is discounted
In 2018, China newly increased Sanfangxiang 500kt/year line and Chengxing two set units with 600kt/year capacity each. Till end Dec, designed capacity reached 10.16 million tons (including part of long-term shut plants). However, above 3 new plants are all delayed to H2 2018 to come up, hence effective capacity increases 600kt/year throughout 2018. Bolstered by enlarging profit, PET bottle chip O/R stood high. According to CCFGroup’s rough estimation, PET bottle chip output amounts to 8.14 million tons in 2018, up 870kt from 2017 level or 12%.
Figure 1. Capacity expansion schedules in 2018
|Company||Capacity||Time of start|
|Jiangsu Sanfangxiang||500||Jun, 2018|
In and after 2019, Yisheng Dalian, Yisheng Hainan and Wankai Chongqing still have capacity launch plan, but startup data is uncertain.
Domestic demand: growth steady, demand potential from non-bottled package field keeps growing
In 2018, PET bottle chip demand may reach 5.15-5.2 million tons, y-o-y growing 6.6-7.6%, among which, bottled package demand accounts for over 90%. Demand from PET sheet and non-bottle food package side grows quickly, such as milk tea lid, package for take-out fruit and fresh etc, with y-o-y growth surpassing 16%. Incremental demand from soft drink, edible oil and PET sheet and others totaled 210kt, 0 and 100kt respectively in 2018 based on rough estimation.
Profit: both foreign and domestic market sees expansion
Till Dec 29, 2018, PET bottle chip processing spread reached 1430yuan/mt and $200/mt, substantially higher from 2017 level. Take processing cost at 700yuan/mt and $110/mt, and calculate cost on at 0.855*PTA+0.335*MEG, cash flow is pegged at 730yuan/mt and $90/mt respectively.
Plant: operating rate constantly high in 2018
PET bottle chip running rate averaged at 82% in 2018 (O/R averaged at 91% if calculated on effective designed capacity). The figure is mainly affected by seasonal factor. In Q3 however, as PTA price soared to above 9000yuan/mt due to spot supply shortage, PET bottle chip faced markedly increasing cost pressure, during which, industry run declined in drastic. Later, with feedstock cost retreating, plant operating rate recovered gradually.
Export: overseas supply shortage boosts China export, whose yearly export volume hit historical high
In 2018, China PET bottle chip exports grew substantially, with share of total consumption rising to 35%. Jan-Nov exports of PET bottle chip (calculating by HS code 39076110) totaled 2.48 million tons. If combine data from HS code 39076910, the figure is assessed at 2.66 million tons. Since Nov-Dec export order intake exceeded 700kt, removing forward order, overall export volume in 2018 may be above 2.9 million tons, up nearly 28% on annual basis.