China's PET Exports Surge in May; Some Freight Routes See Relief, Signaling a Potential Turning Point

China’s PET Bottle Grade Exports Reach Record High in May

According to customs data, China's polyethylene terephthalate (PET) bottle grade exports (HS code: 39076910) totaled 97,000 tons in May 2024, a year-on-year increase of 34.4%.

Analysts attribute the growth in China's PET bottle grade exports to several key factors. Firstly, Chinese enterprises maintain a competitive edge in raw material costs and processing fees, ensuring overall price advantages despite significant increases in shipping costs. Secondly, there is inelastic demand in international markets, with stable order volumes from end customers. Additionally, previous shipping delays have prompted some end users to stockpile in advance, mitigating supply chain risks.

Rising Global Demand Drives PET Bottle Chip Export Growth

Specifically, imports by South Korea and Russia saw significant increases, driven primarily by tariff and exchange rate factors. In May, South Korea imported 31,000 tons from China, a month-on-month increase of 108% and a year-on-year increase of 128%. Russia imported 29,000 tons, marking a month-on-month increase of 53.4% and a year-on-year increase of 60%.

Recently, the EU’s domestic demand for PET bottle chips has rebounded. Due to the EU's anti-dumping duties, imports from China by countries such as Turkey and Vietnam have surged. In May 2024, China's exports to Turkey reached 18,600 tons, an astonishing year-on-year increase of 30,883.7%, while exports to Vietnam totaled 18,300 tons, a year-on-year increase of 235%. Furthermore, PET bottle chip imports from China to Eastern European countries like Bulgaria and Poland have risen significantly, primarily because Ukrainian end users are utilizing these regions for re-export to meet local demand.

Recent Trends: Shipping Costs Constrain Trade, but Some Routes See Relief

Since mid-May, PET bottle chip exports have faced significant challenges due to supply chain bottlenecks, including container shortages and rising shipping costs. Over the past two weeks, China's PET bottle chip prices have remained stable. Although this trend in the shipping market is unlikely to reverse in the short term, freight rates on the India-Pakistan, West Africa, and Southeast Asia routes have slightly decreased compared to last week. With PET bottle chip prices relatively stable and low, the reduction in shipping costs could improve trading conditions for international buyers and sellers, enhancing the liquidity of cross-border trade.

Based on economic analysis by CCF, China's PET bottle grade international trade outlook remains optimistic, bolstered by strong export performance in May. Projections suggest an annual export volume likely to exceed 5 million tons, potentially reaching a peak between 530 to 550 million tons. This indicates robust market demand and strategic competitiveness in global trade dynamics for PET products.