Asian PET markets drift higher after explosion at Formosa’s plant
What happened on Apr 7?
An explosion and a fire occurred at Formosa Plastics Corp.’s naphtha cracker complex on last Sunday, caused by a leak of liquefied petroleum gas (LPG) stemming from a corroded pipeline.
An 870,000 tons/year PX unit at the aromatics plant has been affected by the blast.
Sellers take firmer stance following explosion
As can be seen in the graph below created by ChemOrbis Price Wizard, PET markets across Asia have made an upward move recently.
This was because Asian PET sellers have taken a firmer stance, citing firmer PX prices, strong PTA futures driven by the explosion at Formosa Plastics Corp.’s facility as well as bullish energy costs.
Crude climbs to 5-month high
The bullish run of the energy market was another factor giving sellers an upper hand. ChemOrbis data suggests that both WTI and Brent oil benchmarks are currently standing at a five-month high after steadily increasing since early March.
Chinese PET also supported by VAT cut, limited supplies
In addition to the support from the cost-side, Chinese sellers have also been encouraged by the lack of sales pressure and improving local demand following the VAT reduction effective as of April 1.
A Chinese trader opined, “Suppliers in China are mostly free from any sales pressure as they already sold out their monthly allocations. Plus, demand in the local market has showed an improvement after the government’s VAT cut for the manufacturing sector. Considering all these supportive factors, sellers are standing firm on their offers.”
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