Asian PET markets down after 7 weeks, Europe holds firm
“PET buyers have retreated to the sidelines for the past couple of weeks, resisting the sellers’ cost-driven increases. The high season is over and the cost pressure has been eased by the recent softening in spot MEG prices. The PET market has shifted to the downside as expected,” a trader in China noted.
Spot MEG prices on CFR China basis have registered a total decrease of around $115-120/ton since early September. The PTA market has also softened by $40/ton over the same period.
Several PET producers in China applied $15-25/ton decreases on their export offers last week while one producer elected to cut its prices more visibly by $50/ton, saying, “We lowered our offers sharply due to bearish sentiment. Buyers are still negotiating for further discounts, citing weaker upstream costs, particularly for MEG.”
Export PET prices from South Korea also witnessed decreases of $30-40/ton last week, following the regional trends. Meanwhile, market activity in Asia is likely to decelerate during China’s National Day holiday next week.
In Europe, the PET market has continued to follow an upward trend despite buyers’ resistance. Although initial expectations of three-digit hikes have failed to materialize in the spot market, sellers still achieved increases of around €50-60/ton in their September deals with respect to August.
Distributors across the region acknowledged that they were not able to reflect the significant increase of the PX contract settlement onto their September offers. However, they mostly concurred that the PET market still receives support from the good weather, bullish upstream costs and limited supply for spot material.
A distributor in Switzerland commented, “PET prices might not increase further in the face of buyers’ resistance, yet we are not foreseeing any decreases either, under the current market conditions.”
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