Asian PET markets in limbo between high costs and tepid demand
This, coupled with volatile energy markets, has mitigated the support from still-high oil futures and inflated freight rates.

Markets have snapped a two-week uptrend
Prices across the board were pushed higher by earlier gains in spot MEG and PX costs in the previous two weeks. PET bottle offers reached a 2-month high earlier in July on the back of rising upstream chain amid gradual hikes in energy markets.
However, the uptrend has faltered recently as demand woes came to the forefront, particularly in Southeast Asia. Players said, “Although demand has improved in China, slow trading in Southeast Asia capped sellers’ hike intentions.”
Slow SEA markets overshadow improved China demand
The rising Covid cases have tightened their grip on Southeast Asian markets as countries including Malaysia, Thailand, Vietnam, Indonesia and Cambodia have faced record daily infection counts recently.
A source at a major South Korean producer said prices had been supported by feedstock prices driven by strong crude oil previously. “However, regional demand has been crimped by lockdowns. So, we are focused on the export markets of Africa, the Middle East, Europe and America, where economies are recovering well,” he noted.
Meanwhile, some local PET producers across the region, including Thailand and Vietnam, attempted to seek firmer prices, while justifying their policy with the appreciation of the American dollar against their local currency or rising shipping costs.
Still, they admitted, “End product demand has been discouraging, which led some converters to either stop or reduce production. Some may return to the market just to keep their factories running, but that’s not a sign that demand is back.”
High oil futures still lend support to markets
In the near term, end demand is likely to play a key role in setting the market trend. Players believe that regional buyers may continue to bid lower prices unless end business revives. PET prices may be range-bound while an upside is seen likely only in the case of a sustained rally in crude oil prices.
In upstream markets, WTI (NYMEX) crude oil futures have hovered near a 3-year high despite the recent fluctuations, ChemOrbis data revealed. Spot MEG and PTA prices on CFR China basis softened $20/ton week over week following gains earlier in July, meanwhile.
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