Pbat supply and demand analysis: Supply Remains Ample While Demand Weakens, Market Maintains a Bearish Trend

1. Hot Topics

Domestic PBAT capacity utilization rate: 23.43%.

This week, the operating rate of biodegradable film bags is 38.6%, an increase of 0.6 percentage points compared to the previous week.

Wanhua Chemical, Zhejiang Huafeng, Hubei Yihua, and Gansu Mogaogao each opened one PBAT unit, Xinjiang Lanshan Tunhe opened two PBAT units, and Zhuhai Jinfah opened three PBAT units, including two large and one small. Other companies' units are shut down.

2. Supply side: dominated by leading players operating at low capacity utilization, with overall ample supply of goods.

Domestic PBAT operating rates have remained at a low level of 23.43%. In terms of plant operations, Wanhua Chemical, Zhejiang Huafeng, Hubei Yihua, and Gansu MOGAO each have one PBAT line in operation; Xinjiang Bluestar Tunhe is operating two lines; Zhuhai Kingfa is operating three lines in total, including two large lines and one small line; all other enterprises’ PBAT units are currently shut down.

From a broader perspective, China is the world’s largest producer, consumer, and exporter of PBAT. By the end of 2025, total capacity is expected to reach 1.49 million tons, accounting for 90% of the global total. In recent years, capacity has expanded rapidly, yet the industry’s capacity utilization rate remains below 20%. As of 2024, China’s nominal domestic PBAT capacity had reached 1.441 million tons per year, nearly seven times higher than in 2019, but capacity utilization in November 2025 was only 19.58%. This gap stems from PBAT’s relatively high technical barriers: many small and medium-sized units lack sufficient modification technology, and their products fail to meet downstream processing requirements, making them ineffective capacity that “operates at a loss as soon as it starts up.” Industry operating rates are at historically low levels, while leading companies, leveraging scale and technological advantages, continue to run at high loads, leaving overall market supply relatively ample.

3. Demand side: Domestic demand is recovering slowly, and the pace of exports is slowing down.

In terms of domestic demand, the operating rate of degradable film bags this week is 38.6%, which is only an increase of 0.6 percentage points compared to the previous week. Although the operating rate shows a slight recovery trend, downstream orders for film bags are limited, and the industry's recovery pace is slow. Manufacturing enterprises maintain a strategy of replenishing basic needs, primarily focusing on low-price inquiries for benchmarking, with transactions mostly consisting of small orders, providing limited support for the PBAT market.

In terms of exports, China’s PBAT exports reached 135,900 tons in 2025, making exports the core channel for capacity reduction. However, recent export orders have slowed, and overseas buyers have gained stronger bargaining power, which has exerted some pressure on China’s PBAT exports.

Domestic PBAT Capacity Utilization Trend Chart

4. Market Sentiment and Price Outlook

Recently, PBAT production has shown no significant change, with leading enterprises continuing to operate at high rates. Market supply remains ample, and companies are under pressure in terms of shipments. Downstream demand follow-up is average, with limited support from the release of orders for biodegradable film bags, while product manufacturers are making low-priced purchases based on rigid demand. Export orders have slowed, overseas buyers’ bargaining power has increased, and demand support remains weak. Raw material prices are fluctuating within a narrow range, and cost pressure persists over the long term. In the short term, PBAT is expected to mainly digest previous declines and fluctuate within the range of RMB 11,300-11,600/ton, with an average price of RMB 11,450/ton.

5. Summary of Supply and Demand Dynamics

Overall, the current PBAT market is characterized by "low operating rates, weak demand, and ample supply." Capacity utilization has remained at a historically low level below 25% for an extended period, but the large capacity base means absolute supply is still abundant. Operating rates at downstream biodegradable film and bag producers are below 40%, and demand recovery has been slow. Although the export market is expected to see long-term growth, its short-term pace has slowed. The supply-demand imbalance is unlikely to be reversed in the near term, and the market is expected to remain weak.