Chinese PET offers competitive edge across Asia
As can be seen on the graph above obtained from ChemOrbis Price Index, the gap between export Korean and Chinese PET prices has gradually widened since the middle of June amid more aggressive prices out of China. Chinese PET still trades around $65/ton below South Korean cargos on a weekly average.
“We were not caught by surprise as many Chinese sources had pulled their offers below $1300/ton FOB threshold earlier this month. Not only discouraging demand but also new PET capacities inside China weighed down on regional markets. Although overall activity remained muted in the region, some buyers opted to turn to Chinese origin instead of sourcing their basic needs from their own local market,” a player in Southeast Asia highlighted.
A Malaysian PET converter confirmed, “We find Chinese export offers more attractive nowadays. We decided to wait before purchasing raw material for a while after seeing the sharp declines for this origin.”
Meanwhile, a buyer from Thailand stated, “Chinese sellers are likely to maintain their prices below $1300/ton in August under the pressure of the weaker yuan and increased capacity inside China. Yet, we need to observe the impact of PTA supply issues in Mexico to see whether it will improve sentiment on sellers’ side or not in the days to come.”
A South Korean source applied additional decreases of $20/ton this week and noted, “The sentiment still hints at a soft trend considering the existence of attractive offers from China and summer holidays in Europe.”
On another note, a Chinese producer elected to maintain their PET prices this week following relentless drops in the previous weeks, saying, “Upstream costs have been lending some support to the PET market in the last couple of days. Now that some supply concerns have come to the fore in America given PTA production issues in Mexico, the bearish trend may lose its pace,” a producer source commented.
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