HomeIndustry InsightsPET Bottle Grade Inventories Hit Multi-Year Low Amid Production Cuts and Supply Adjustments

PET Bottle Grade Inventories Hit Multi-Year Low Amid Production Cuts and Supply Adjustments

2026-02-06

China's PET (Polyethylene Terephthalate) chip bottle grade industry is currently experiencing a significant reduction in factory inventories, reaching levels not seen in recent years for this seasonal period. According to the latest industry data, this trend emerged in December 2025 and is attributed to a combination of volatile raw material costs and concerted industry efforts to reduce output.

A key indicator of this shift is the average factory inventory, which has now dropped to approximately 11 days of production supply. This represents a substantial decline of roughly 50% from earlier peaks, with total physical inventories estimated at 700,000 metric tons.

Analysts point to several concurrent factors driving this drawdown. A primary driver has been the industry's self-imposed production discipline, with average operating rates held near 80% since mid-2025. This was followed by planned year-end maintenance at several facilities. The trend was accelerated by producers actively fulfilling existing contracts and was further compounded by unexpected supply disruptions in certain regions, tightening the spot market.

The current market reflects a distinct regional supply-demand imbalance. Major maintenance shutdowns, including a significant 1.5 million metric ton facility in Hainan Yisheng, have created localized shortages. Concurrently, trading activity has been characterized by oversold positions, prompting increased buying interest from end-users to replenish stocks. While this has supported spot processing margins—maintaining them between 500 and 800 yuan per ton since January—analysts caution that a significant volume of inventory has simply moved from factory warehouses into broader distribution channels rather than being consumed, indicating that overall social inventory remains elevated.

The sustainability of the current lower inventory environment is a focal point for market observers. The prevailing view suggests that if the industry maintains its disciplined approach to production control, a tentative supply-demand balance could be achieved in the first half of the year. However, a rapid return to higher operating rates spurred by improved profit margins could quickly reverse the current trend, leading to a renewed cycle of inventory accumulation.

As a participant in this market, Wankai New Materials notes it will continue to monitor these evolving dynamics closely, emphasizing a strategy of operational stability and collaboration within the supply chain.

Reference

https://www.ccf.com.cn/newscenter/detail-120000-2026020400076.shtml