Asian PET bottle markets drop to multi-month lows amid persistent demand woes

In China and Southeast Asia, PET bottle markets mostly witnessed small discounts over the past week, pressured by persistently poor demand and reduced raw material costs. Despite production cuts by some Asian producers to balance supply, prices failed to sustain stability as some sellers conceded to issue discounts to stimulate buying interest.

Chinese export prices dip, S. Koreans stay flat

In export PET bottle markets, FOB China prices have been on a stable to lower path since mid-July as ChemOrbis Price Index data suggest. During the week ending August 23, Chinese offers broke a two-week stagnation, dipping by $5-15/ton. Meanwhile, South Korean export offers remained unchanged for the third straight week but have also been on a stable to softer path since late May. Export PET bottle prices from China were assessed $5-15/ton lower from the previous week at $865-900/ton on an FOB, cash basis. The midpoint of the price range marked the lowest level since early January.

The weekly average of South Korean offers remained at the lowest point observed since late January. Prices were assessed stable at $930-950/ton FOB Busan in the week ending on August 23.

“Persistently reducing costs and sluggish demand have outpaced the impact of tighter supplies,” opined a source from a Chinese producer, who also noted that purchases of downstream factories remained limited.

SE Asian import markets snap 2 weeks of stability

In Southeast Asia’s import PET bottle markets, prices have been stable to lower since late May, according to ChemOrbis Price Index. In the latest week’s assessments, CIF prices broke a two-week stable trend, with the low end of price ranges trimmed by $10/ton to $910/ton. These downward adjustments pushed the weekly average of prices back to mid-May levels.

However, Southeast Asian buyers remained cautious, believing prices might drop further given the market dynamics. “We have sufficient stock on hand, so we’re not planning to make additional purchases,” commented a Malaysian converter.

Locals follow suit in China, Malaysia, and Thailand

In China, Malaysia, and Thailand’s domestic PET bottle markets, prices also moved south on unfavorable fundamentals. China and Malaysia saw local prices decrease by around $5-10/ton during the third week of August, while Thailand’s domestic PET market faced more significant drops of up to $60/ton.

A Malaysian converter noted the narrow price gap between local and imported material, stating, “The difference between imports and local supplies is just MYR50/ton, making domestic sources more appealing. Additionally, importing has become challenging due to long lead times and unpredictable customs clearance. Market dynamics remain weak.”

“Order entries are slow because of the waning demand,” commented a source from a Thai producer.

Cost support continues to weaken

On the cost side, both crude oil futures and monomer prices continued to decline weekly.

As of the August 22 settlements, Brent crude futures fell nearly 5% on a weekly basis, settling at $77.22/bbl. According to ChemOrbis Price Wizard data, Brent crude futures briefly rebounded last week after a five-week slump but have now returned to levels observed two weeks ago.

Spot PTA and MEG prices, as of August 22, declined by $20/ton on a weekly basis, standing at $715/ton and $520/ton, respectively, on a CFR China, cash basis. Spot PX prices also dropped by $45/ton, settling at $935/ton on similar terms. This week’s revisions mark the seventh consecutive week of declines for PTA and PX prices.