PET Raw Material Costs Retreat but Remain High, Aluminum Prices Decline Month-over-Month
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PET Raw Material Costs Retreat but Remain High, Aluminum Prices Decline Month-over-Month
This report provides a detailed analysis of the cost changes in China's essential consumer goods industry in May 2026, focusing on changes in the prices of PET, aluminum, and other raw materials.
- PET prices remain high but have declined from the April peak, increasing approximately 40% year-over-year.
- Aluminum prices have decreased month-over-month, leading to a reduction in the beer cost index.
- Dairy supply and demand has improved, but barley import prices continue to rise.
- Cost pressures for some condiments and frozen foods have eased.
- It is expected that domestic milk supply will continue to shrink in the second half of the year, with demand gradually recovering.
Report interpretation
Overview
This research report primarily focuses on the cost changes in China's essential consumer goods industry in May 2026, particularly the price trends of key raw materials such as PET, aluminum, and barley and their impact on corporate profitability. Although PET prices have retreated from their April peak, they remain at relatively high levels; aluminum prices have decreased month-over-month, reducing cost pressures in the beer industry. Additionally, the report analyzes cost trends in multiple细分 industries including dairy products, condiments, and frozen foods, pointing out potential challenges and opportunities ahead.
Core views
In May, PET prices remained high but retreated slightly from the April peak, increasing approximately 40% year-over-year to around RMB 8,615 per ton. Packaging material costs increased by 47% due to rising PET prices. The decline in aluminum prices alleviated cost pressures in the beer industry. In the dairy sector, despite continuing increases in barley import prices, domestic fresh milk prices stabilized as supply-side adjustments were made through reductions in herd sizes to balance supply and demand. Cost pressures in the condiment industry have eased overall, especially for compound condiments and soy sauce where cost indices have fallen. In the frozen food industry, declines in corn starch and palm oil prices offset cost pressures from rising chicken and shrimp prices. The report suggests that these cost changes will directly affect the gross profit margins (GPM) of related enterprises and differently impact cost benefits across categories. For example, compound condiment and frozen food companies benefit the most, while pet food and soy sauce companies face relatively lower cost benefits.
Analysis framework
The data tracking methods used in the report include: 1. Comparing price changes across different time periods (e.g., comparing the average value in 2025 with May 2026) to assess trends in cost pressures. 2. Analyzing the proportion of each raw material in total costs to determine its impact on final product costs. 3. Combining locked-in raw material price policies of companies to estimate cost expectations for the next few quarters. 4. Using charts to display cost index changes for each category, helping readers intuitively understand cost fluctuations.
Methodology notes
The core focus of this industry is on how changes in supply and demand affect costs.
The supply-demand framework is used to analyze how changes in supply and demand in raw material markets influence prices, thereby affecting downstream consumer goods costs.
Analyze the impact of raw material costs on a company's free cash flow.
Free cash flow analysis is used to evaluate whether companies will have sufficient cash flow in the coming quarters to handle cost increase pressures.
Key data
- Year-over-Year Change in PET Price+40%As of May 31, 2026, spot PET prices increased approximately 40% year-over-year.
- Month-over-Month Change in Aluminum Price-1.5%Aluminum prices decreased by 1.5% month-over-month, providing some cost relief for the beer industry.
- Year-over-Year Change in Barley Import Price+2.7%Barley import prices increased 2.7% year-over-year, adding some cost pressure to the beer industry.
- Year-over-Year Change in Soybean Price-27%Soybean prices decreased by 27% year-over-year, helping to reduce the cost pressure of soy meal.
- Month-over-Month Change in Palm Oil Price-1.6%Palm oil prices decreased by 1.6% month-over-month, providing some cost relief for the beverage and snack industries.
Impact & implications
The report suggests that changes in raw material prices such as PET and aluminum will directly affect the cost structure of related consumer goods. For the beer industry, the month-over-month decline in aluminum prices helps alleviate cost pressures, while the continued high level of PET prices continues to exert pressure on packaging material costs. Rising barley import prices in the dairy industry may increase production costs, but since domestic fresh milk prices are stabilizing, overall pressure remains manageable. Similar situations exist in the condiment and frozen food industries, where compound condiment and frozen food companies benefit from declines in certain raw material prices, while pet food and soy sauce companies face greater cost pressures.
Risks
- Risk of upstream supplier contract breaches.
- Conflict in the Middle East could lead to further cost increases in the second half of 2026.
What to watch
- Close attention should be paid to whether raw material prices continue to rise in the second half of the year.
- Monitor whether companies take pricing measures to address cost pressures.