PET bottle chip market may face some pressure

PET bottle chip demand totaled 4.24 million tons in Jan-Sep 2019, y-o-y growing 5%, a little bit slower from a year past. Soft drink still takes the dominant share, possessing 79% of China domestic demand. Edible oil demand for PET increases 1% on year, while PET sheet and other demand for PET grows rapidly by 14-15% year on year in Jan-Sep 2019, which mainly comes from low-medium end packaging demand. Some PET sheet plants that produce high end specs didn't operate well in 2019. Besides, export order intake was decent in H1 2019. Jan-Sep export volume totaled 2.55 million tons, preserving an 18% y-o-y growth. Overall, PET bottle chip market is in modest destocking process in Q1-Q3 2019. Supply is barely impacted due to delay of new startups. In Q4, as new capacity comes up and demand flattens, PET bottle chip market may face some pressure.