Firming persists in China’s PET market on a series of bullish factors
by ChemOrbis Editorial Team - content@chemorbis.com
According to ChemOrbis Price Index, export PET prices out of China have been steadily increasing since mid-October to reach their highest levels since May 2015 on a weekly average. Data also reveal that local PET prices followed export PET prices higher starting from late October to hit the highest level not seen in more than two and a half years recently.
Although this time of the year should theoretically be the low season for PET applications due to the winter season, the rally in the PET market persists due to a number of bullish factors. First and foremost, upstream markets have remained strong. With crude oil hitting a three-year high, PET feedstock costs have also been firming up.
Second, demand is considered healthy both from export destinations and local market. Meanwhile, Chinese producers’ availability has tightened as a result of an increasing number of export orders as well as backlog orders. Plus, there are several PET and PTA shutdowns across Asia, which contributes to availability concerns.
A source from a domestic producer noted, “We applied weekly increases of up to $30/ton on our export offers in line with increasing crude oil futures and spot prices in Asia’s MEG and PTA markets. We are receiving a good number of inquiries from countries including India, the Middle East, Southeast Asia, Egypt and Russia. Local demand is not that spectacular. However, we are not under sales pressure as we still have backlog orders to clear.”
“Demand for PET bottle is slow due to off season. However, demand for oil bottles is rather good. Prices remain supported by firmer raw material and crude oil prices,” commented a player.
Given the production hiccups for PET and a number of maintenance shutdowns at Asian PTA suppliers, some producers also prefer to limit their sales and stand firm on their offers.
China’s Jiangyin Chengold Packaging Materials shut its PET line in Jiangyin following a fire that broke out during the start-up process. China’s Hainan Yisheng, meanwhile, plans a maintenance shutdown at its PET line in January for a month.
As for PTA, China’s Jiangsu Sanfangxiang Group shut one of its PTA units in Jiangyin, China on January 1. The turnaround is expected to last for around 20 days. Taiwan’s OPTC plans to shut its PTA unit in Taouyuan, Taiwan for a 3-week turnaround in mid-January. India’s Reliance was readying to shut one of its PTA lines in Dahej, India for maintenance on January 5 for around two weeks.
On top of the aforementioned bullish factors, the ban of scrap plastics in China is also considered supportive of price hikes for virgin PET cargoes. A Vietnamese trader commented, “We don’t think PET prices will see any decreases in the near terms as demand towards prime PET will improve, particularly after the Chinese government started a ban on the imports of scrap plastics, effective as of January 1, 2018.”
Although this time of the year should theoretically be the low season for PET applications due to the winter season, the rally in the PET market persists due to a number of bullish factors. First and foremost, upstream markets have remained strong. With crude oil hitting a three-year high, PET feedstock costs have also been firming up.
Second, demand is considered healthy both from export destinations and local market. Meanwhile, Chinese producers’ availability has tightened as a result of an increasing number of export orders as well as backlog orders. Plus, there are several PET and PTA shutdowns across Asia, which contributes to availability concerns.
A source from a domestic producer noted, “We applied weekly increases of up to $30/ton on our export offers in line with increasing crude oil futures and spot prices in Asia’s MEG and PTA markets. We are receiving a good number of inquiries from countries including India, the Middle East, Southeast Asia, Egypt and Russia. Local demand is not that spectacular. However, we are not under sales pressure as we still have backlog orders to clear.”
“Demand for PET bottle is slow due to off season. However, demand for oil bottles is rather good. Prices remain supported by firmer raw material and crude oil prices,” commented a player.
Given the production hiccups for PET and a number of maintenance shutdowns at Asian PTA suppliers, some producers also prefer to limit their sales and stand firm on their offers.
China’s Jiangyin Chengold Packaging Materials shut its PET line in Jiangyin following a fire that broke out during the start-up process. China’s Hainan Yisheng, meanwhile, plans a maintenance shutdown at its PET line in January for a month.
As for PTA, China’s Jiangsu Sanfangxiang Group shut one of its PTA units in Jiangyin, China on January 1. The turnaround is expected to last for around 20 days. Taiwan’s OPTC plans to shut its PTA unit in Taouyuan, Taiwan for a 3-week turnaround in mid-January. India’s Reliance was readying to shut one of its PTA lines in Dahej, India for maintenance on January 5 for around two weeks.
On top of the aforementioned bullish factors, the ban of scrap plastics in China is also considered supportive of price hikes for virgin PET cargoes. A Vietnamese trader commented, “We don’t think PET prices will see any decreases in the near terms as demand towards prime PET will improve, particularly after the Chinese government started a ban on the imports of scrap plastics, effective as of January 1, 2018.”
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