Asian PET markets hit 5-month high on cost pressure

Asia’s PET bottle markets have extended their gains into the sixth straight week and hit multi-month highs, supported by the strengthening upstream markets. Adding to the scene has been the nascent demand recovery in China’s local market amid tight supplies. Export markets, meanwhile, remained subdued amid global economic slowdown.

Export prices retrace February losses

ChemOrbis Price Index suggests that the weekly averages of FOB China/South Korea prices have recently hit their highest level since mid-October 2022 after posting $95-100/ton hikes in the past six weeks. This clearly shows that prices have far erased February losses that totalled $40-50/ton.

The weekly averages stood at $1070/ton FOB Korea and $1035/ton for FOB China in the week ending April 7.



PX, PTA prices extend gains as crude oil prices wildly swing

The main pressure point has been rising feedstock prices as both local producers and exporters were encouraged to lift their PET offers.

Spot PX and PTA prices on CFR China and FOB Korea basis have been rising steadily for the past three weeks and posted cumulative gains of 11% and 17%, respectively. Needless to say, surging crude oil futures following OPEC+’s decision reinforced the bullish rally for these feedstocks. Still, prices for these products had posted gains even when crude oil futures hit 15-month lows 2 weeks ago amid the banking crisis that roiled commodity markets.

This was because price hikes were mainly driven by supply limitations and higher demand arising from the start-up of a 1.5 million tons/year PTA plant in China, not to mention planned turnarounds at PTA plants. Chinese Wanxiang Group’s bulky purchases supported PX futures.

Spot MEG prices on CFR China basis, however, have only edged up by $5/ton this past week after two weeks of stability.

Tight local supplies support gains in China

Tight supplies inside China allowed sellers to raise their offers steadily. Although purchasing activity was mainly tied to the basic needs, players shared comments about domestic demand faring better than export markets. Players attributed better demand to a slew of maintenance shutdowns at local producers.

The prices were assessed CNY150-200/ton ($22-29/ton) higher from the previous week at CNY7700-8000/ton ($991-1029/ton excluding VAT) ex-warehouse, cash including VAT. According to ChemOrbis Price Index, cumulative increases for local PET bottle reached over 10% in a month.

SEA demand dimmed by parity challenges, Ramadan

SEA demand was mostly under the shadow of the depreciating local currencies against the USD. Some buying resistance was evident in Thailand, while the Ramadan lull affected activity in Malaysia. Nevertheless, CIF SEA prices followed suit and gained 9% to reach $1060/ton in the past six weeks, the weekly average data on ChemOrbis Price Index revealed.

Going forward, some replenishment activity may be seen after a period of inactivity. Since rising costs have been the key driver of the uptrend, buyers may decide to secure additional cargoes as a hedge against further hikes.

China ramps up PET exports

In statistics, China’s combined PET exports of bottle and textile grades rose by 9% from a month ago to around 460,000 tons in February. On a yearly basis, the total volume was also up by 38%.

It would not be wrong to say that export volumes out of China will keep rising given its huge installed capacity and approaching high season for bottled drinks. Nevertheless, European buyers have been shunning Chinese imports due to the antidumping investigation against this origin. This will surely lead to a drop in China’s exports to the bloc.