China’s local PET market hits 6-month high
Players cited producers’ limited availability as well as the recent gains in upstream costs as the main reason behind higher PET offers in the local market.
A source from a domestic PET producer commented, “We are not open to negotiations on our current offers. Demand is healthy thanks to the warm weather while we are still feeling free from sales pressure owing to our remaining backlog orders.”
A bottle manufacturer in Zhejiang noted, “Local prices moved higher due to increasing costs. Plus, local producers are not feeling sales pressure as they mostly have backlog orders to clear.”
In the upstream markets, spot MEG prices posted weekly gains of $30-35/ton as of the end of last week due to some plant shutdowns in Asia, hovering near the $900/ton CFR China threshold nowadays.
Spot PTA prices did not witness any major changes, except for a slight weekly hike of around $5/ton; however, some players reported that BP Zhuhai’s PTA plant was affected by Typhoon Hato, which hit Hong Kong with heavy flooding on August 23. “The producer shut its 1.25 million tons/year plant on August 24 after lowering down run rates due to the typhoon,” said a Chinese trader. This unplanned shutdown might lend support to the PTA market in the days ahead, concurred some players.
Meanwhile, regarding the ban on the imports of scrap plastics, a few players opined, “China imports a considerable amount of scrap PET every year. Therefore, we think that the ban might have a notable impact on the virgin PET market by the end of the year and support a firm outlook.”
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