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The ball is still bouncing up but if demand doesn't follow up downside is the next trend
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The ball is still bouncing up but if demand doesn't follow up downside is the next trend

Views:0     Author:Site Editor     Publish Time: 2019-06-21      Origin:Site

Two assumptions for future market:

First assumption: PET bottle chip price moves forward and back or modestly trace up feedstock trend. To fulfill this trend, feedstock needs to stay firm, PET bottle chip delivery needs to speed up, polymerization rate adjust accordingly and demand sustains its momentum.

Second assumption: PET bottle chip market faces downward pressure again. This way, PET bottle chip producers need to maintain O/R high constantly, feedstock tends to fluctuate narrowly or correct down, downstream demand wanes out after several rounds of purchases.

Suppose the first two conditions of the NO 1 assumption carries out, demand moves like NO 2 assumption. Looking at the supply side, polymerization rate is now at high rates, and the stock piled end May is not effectively consumed. Supply is ample as a whole, though delivery in some plant appears a bit tight. Besides, in H2 2019, PET bottle chip new capacity is of big chance to delay release. Risk in supply side won’t expand temporarily. Launch of Yisheng Dalian’s PET bottle chip plant may delay to Q4. Yisheng Hainan and Wankai Chongqing projects are expected to commence in 2020. Hence supply side risk could still be avoided via O/R adjustment later on.

In demand side, the bouncing power of the ball is vanishing. Though PET bottle chip price moved up under rising feedstock, downstream procurement has slackened. Trading reduced obviously comparing with previous rounds of purchases. Weaker demand is also a restricting element for price hike.

Shortly, the ball is still bouncing up, but if demand doesn't follow up, downside is the next trend.

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