China's PET Resin Output Cuts: One Month On, What It Means for Global Buyers

Coordinated Actions by Key Producers

From July onward, leading producers including Yisheng, China Resources, Wankai, and Sinopec have lowered PET bottle-grade resin output by approximately 20%. Sanfame (Jade brand PET resin) has remained offline since late May, impacting 1 million tons of capacity, while Billion has been running at roughly 70% capacity, also representing reductions exceeding 20%. Overall, around 2.59 million tons of capacity have been directly affected by these measures. Considering previously idled and upgraded units, the total impact reaches around 4.9 million tons.

As a result, industry operating rates have declined significantly—from an average of 94.3% in May to roughly 77% by early July—representing a drop of nearly 17 percentage points. Actual operating rates will continue to depend on the execution of shutdown plans and real-time market responses.

Market Impact and Processing Margins

China’s PET resin exports achieved impressive growth in Q2, with orders rising by 69% year on year. However, as market focus shifted back to domestic supply-demand conditions, rising feedstock costs and slower-than-expected polyester plant shutdowns limited the recovery in processing margins.

According to CCF market data, following the implementation of output cuts, market returns rebounded significantly but have since leveled off, fluctuating within a moderate range. This reflects a market still in the process of stabilizing and seeking balance.

Inventory Adjustment and Global Relevance

Producers are extending shutdown periods to help absorb existing inventories. While overall inventory levels are not excessively high, destocking has progressed slowly, indicating that new order growth is not yet fully offsetting supply. Many downstream converters had already built inventories in advance, and trading activity has been relatively conservative, with opportunistic replenishment only occurring during price dips.

For overseas buyers, such production adjustments in China are highly relevant. As the world’s largest producer and exporter of PET bottle-grade resin, China's supply decisions directly influence global market availability, pricing trends, and even delivery schedules. Awareness of these changes allows international buyers to better manage their own inventory strategies, secure supply continuity, and anticipate potential cost fluctuations. Furthermore, coordinated production cuts often reflect broader industry shifts, such as the introduction of new capacity or structural changes in inventory, which may shape global market dynamics well beyond the immediate period.

Wankai Perspective

As an active participant in China's Polyethylene Terephthalate (PET) resin industry, Wankai has implemented planned production adjustments in response to market conditions and remains dedicated to supporting the long-term stability of the global PET supply chain. We continue to focus on optimizing operations, maintaining reliable supply for our international partners, and sharing timely market insights to help customers navigate changing industry dynamics.

Source (in Chinese): CCF Market News