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Asia PET markets stay soft as supplies accumulate amid seasonal lull

by Merve Sezgün - msezgun@chemorbis.com
  • 21/11/2019 (04:14)
PET bottle prices in most Asian countries extended their losses into another week as the traditional seasonal lull continued to dominate market sentiment and rising supplies kept trading activities limited.

Prices hover around multi-year lows

PET markets in China, Vietnam and Thailand witnessed renewed declines this week which, however, have failed to boost buyers’ demand so far.

Data from ChemOrbis Price Index suggest that the weekly averages of PET bottle prices on FOB/ex-warehouse China basis are currently hovering around their lowest levels since February 2016.

Vietnam’s and Thailand’s local PET markets, meanwhile, have hit around a three-year low following the latest round of price cuts, the weekly average data also reveal.

Supplies increase amid limited trading

Several PET producers in China offered additional discounts of around $5-15/ton to export markets in order to reduce their inventory pressure amid accumulating supplies.

“Supply levels have been increasing in response to persistently lackluster demand from converters towards the year-end. Some producers are trying to control their output by cutting operating rates to help relieve the downward pressure,” a trader operating in Shanghai commented.

New capacities also weigh on outlook

PET buyers refrain from making any large-scale purchases amid expectations of supply increases over the near term as new capacities are coming on-stream both in China and Southeast Asia.

Yisheng Petrochemical started up its new PET line in China on November 8. Sources close to the company reported that the company successfully achieved prime product from the 600,000 tons/year plant.

Several other new plants are slated to be launched in the first quarter of 2020.

Lack of support from cost side

In the upstream markets, spot PTA and MEG prices on CFR China basis have been largely stable for the past two weeks following consecutive losses, according to ChemOrbis Price Wizard. Spot paraxylene prices on FOB Korea basis, meanwhile, have also stabilized recently at their lowest levels since June 2017.

“The PET market is facing a lack of support from the cost side,” sellers noted.
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