Cost Support and Demand Recovery May Lead to a Temporary Rebound in China’s PET Market

August 25, 2025 | Compiled by CCF News

As of August 22, the average operating rate of domestic PET bottle grade plants was around 79%, remaining below 80% for eight consecutive weeks. Although this is lower than the same period in previous years, it marks an improvement compared with the sharp declines seen in 2023 and 2024. This year, producers have largely adopted a “time-for-space” strategy—extending low operating rates to ease inventory and margin pressures—rather than executing drastic production cuts.

Since mid-August, PET producers have begun to see inventory reduction. Downstream textile operations in Jiangsu and Zhejiang have raised their run rates, and demand from beverage packaging and consumer goods has picked up ahead of the traditional peak season. These factors have provided additional support for the PET bottle chip market.

Supply Outlook

• New capacity: About 600,000 tons per year of new capacity is planned to start up between late Q3 and Q4.
• Restarts: Some major plants, including Yisheng Hainan and Wankai Chongqing, are expected to restart in September, while others may reduce output.
• Market competition: Certain traders are offering discounts to meet monthly contract targets, which could intensify competition and limit plant operating rate recovery.

Constraints

Profit margins remain under pressure, making it difficult for small and medium-sized producers to sustain high operating rates. In some cases, keeping plants idled may be more practical than full production. Intense domestic competition has extended into overseas markets, putting additional pressure on exports.

Market Outlook

• August: Operating rates are expected to remain near current levels.
• September: A temporary rebound above 82% is possible, though some early restarts could bring supply forward.
• Q4: Average operating rates may rise above 85% in mid-to-late Q4 as new capacity comes online and idled plants resume operations.
• Year-end: If demand softens after the peak season while supply continues to grow, operating rates could decline again toward year-end.

Conclusion

The PET bottle chip market in China has likely passed its recent low point. Inventory destocking and seasonal demand expectations are supporting confidence. However, whether recovery can be sustained will depend on the balance between new supply and actual demand. If the traditional “Golden September and Silver October” peak season delivers, operating rates may continue to improve; if not, renewed pressure could emerge later in the year.