Continuous Crude Oil Decline Pressures PET Market: Cost Challenges and Capacity Management in Focus

For Polyethylene Terephthalate (PET) bottle grade chips, the drop in PX and PTA prices has eased cost support. However, with processing margins already at relatively low levels, further downside for bottle chip prices appears limited.

Operating rates in the polyester sector showed a modest increase. As of August 8, the average industry operating rate stood at approximately 88.8%, up 0.7 percentage points from the previous week. Additional output from newly commissioned units and the restart of previously idled facilities contributed to a slight supply recovery. Nevertheless, the polyester filament sector has already implemented its first round of production cuts in August, and any extension of such measures to the bottle chip segment could put operating rates under renewed pressure.

On the feedstock side, PX supply-demand conditions remain balanced, with prices largely following crude oil movements. PTA margins remain under CNY 200/ton, and the market is closely watching potential increases in plant maintenance. MEG supply remains relatively tight, with low visible inventories and firm coal prices providing support despite minor stock builds.

In the short term, the PET bottle chip market is expected to move within a narrow range, as cost fluctuations remain modest and demand recovery is yet to materialize. Over the medium term, demand improvement will depend on the start of autumn and winter orders, which may be delayed this year due to the leap lunar month, potentially shifting the seasonal recovery toward the fourth quarter.

Industry participants note that while lower crude oil prices offer some relief to production costs, sustained demand weakness may require careful capacity management and pricing strategies to maintain market stability.

Source: China Chemical Fiber Information Network (CCF), August 11, 2025.