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BOPET Market in China Sustains Stability Despite Bottlenecks in Jan 2024
BOPET Market in China Sustains Stability Despite Bottlenecks in Jan 2024

BOPET Market in China Sustains Stability Despite Bottlenecks in Jan 2024

  • 01-Feb-2024 2:28 PM
  • Journalist: Li Hua

In a surprising turn of events, the Biaxially Oriented Polyethylene Terephthalate (BOPET) prices in China have unexpectedly shown stability during the H2 of January 2024 despite a bullish PTA feedstock price. This seemingly positive news comes with a stipulation, as underlying factors hint at a potential price hike for BOPET on the horizon in February amidst trade disruption risk.

The current BOPET price stability was attributed to the offsetting effects. Higher PTA costs have helped balance the equation, mitigating the potential increase in production costs due to stable demand in the region. Unfortunately, the current price trend comes at a time when export demand for BOPET was facing headwinds. Global markets, particularly in the Northern Hemisphere, were in their seasonal lull, making buyers hesitant to commit to large orders. Moreover, the demand for BOPET Resin from the downstream PET bottle packaging market remained lackluster, primarily due to the typical off-season. Additionally, the ongoing geopolitical tensions and uncertainties in the shipping environment further dampened purchasing enthusiasm which kept the prices intact for BOPET during this timeframe. Therefore, during the week ending January, the prices of the product remained unchanged assessed at 1124 USD/tonne BOPET Film 13 micron spot Ex-Shanghai, China.

This temporary equilibrium awaits the market with the full impact of rising shipping and insurance costs stemming from the geopolitical tensions in the Red Sea region. The escalating tensions in the Red Sea region raise concerns about potential trade disruptions. If these materialize, transportation costs and delivery delays could significantly impact production costs. As a ripple effect, the current balance between higher PTA costs and stable BOPET demand might not hold if either factor changes. Further rise in PTA prices might not fully offset rising shipping costs, pushing the equilibrium towards price hikes for BOPET.

As per ChemAnalyst, while stable feedstock costs and steady demand provide temporary stability, the threat of trade disruptions, rising shipping costs, and future PTA fluctuations pose significant challenges to raising the offered quotations of BOPET prices in February. Regarding delivery velocity, it is anticipated that BOPET manufacturers will retain an average inventory of less than thirty days before the Spring Festival and that inventory may rise significantly throughout the holiday, averaging an increase of seven to ten days. The BOPET mills are likely to restock in March, as collection by major beverage factories and some traders is expected to be bearable following the break. Additionally, there will be a cycle of vigorous export deliveries both before and after the Spring Festival holiday.

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