To better serve enterprises’ risk management needs, the Zhengzhou Commodity Exchange (ZCE) in China has introduced futures trading for bottle-grade Polyethylene Terephthalate (PET) resin. PET resin is essential to daily life and is mostly used to make mineral water bottles.
Bottle-grade PET resin futures witnessed trade volume of 133,444 contracts on the first day of trading, equal to 13.17 billion yuan (about $1.86 billion USD). The benchmark price was initially fixed at 6,850 yuan ($966 USD) per ton, and six contracts were offered.ZCE manager Niu Yike emphasized that the launch of these futures will supplement currently available polyester-related products, allowing businesses to better manage their inventories and hedge, thereby bolstering the high-quality expansion of the sector.
Crude oil is the main raw material used to make bottle-grade PET resin; hence, changes in its price have a big influence on the cost of PET resin. According to senior executive Chen Canzhong, changes in crude oil prices over the last three years have topped 60%, which has had a significant negative impact on the operations and output of businesses such as Zhejiang’s new material firm. Production is further complicated by the periodic fluctuations in PET resin sales, which highlights the critical need for financial instruments to mitigate market risks.
China produced 13.1 million tons of bottle-grade PET resin in 2023; of that amount, it consumed 7.56 million tons, or 24% of the world market. With products reaching over 100 countries, China is currently the world’s top exporter of bottle-grade PET resin.
