Bullish trend loses pace in Asia’s PET markets
The recent declines in MEG prices also contributed to the slowing of upward trend in the region’s downstream PET market. Spot MEG prices dropped by around $70/ton on an FOB Korea basis week over week. Some market sources attributed the recent losses for the feedstock to slower demand from polyester producers who reduced their operating rates.
Regional suppliers elected to keep their import PET offers steady or issue smaller hikes of around $20-30/ton this week, citing waning demand and the pressure from falling MEG prices. A source from a Chinese producer highlighted, “We maintained our PET prices across the region as PTA prices remained firm while MEG prices posted a sharp decrease. Demand from converters is not as strong as it was in the previous weeks and our customers are pushing for discounts.”
A second Chinese source applied $30/ton hikes on their export PET offers. “We managed to conclude some deals albeit for limited quantities. MEG prices have not given any signs of recovery so far. We believe that they may break below the $900/ton threshold soon,” he projected. “We adjusted our export prices down by $20/ton based on bearish MEG costs,” a South Korean producer confirmed.
A bottle manufacturer in Indonesia expects end product orders to wind down due to the upcoming rainy season in October before improving towards the end of the year. “Overall, PET supplies are smooth,” he added. Taiwan’s Far Eastern New Century is readying to start up its new PET plant in Vietnam by the middle of September, contributing to the lack of supply concerns in Southeast Asia.
A manufacturer in Malaysia commented, “PET prices in China and Southeast Asia are still firm whereas sellers may not obtain any additional hikes considering the mounting resistance on the side of buyers.”
According to the weekly average data from ChemOrbis Price Index, export PET prices out of South Korea hit a 5-year high last week, while prices out of China stood at a 3-month high.
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