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Global PET bottle demand signals improvement, yet cost pressure still in place

by Merve Madakbaşı -
  • 30/04/2020 (12:09)
PET bottle prices in major markets have been seeking a ground for the last couple of weeks after sizable drops sent offers to their lowest levels since ChemOrbis started compiling data in 2008/2009. Although some markets including Asia, Mediterranean and Europe have signaled for a recovery in buying interest, a lack of support from costs keeps the outlook blurry for now.

Warmer weather spurs slightly better demand in China

In China, players voiced their cautious optimism about demand for PET resin. Buying interest has relatively improved but still lagged behind the same period of last year, they concurred.

Sellers noted, “Activity in China thinned ahead of the extended Labor Day holidays that start on Friday. However, we expect to see a recovery in buying appetite afterwards as May and June point to high season for beverages.”

Prices saw $650 FOB China under pressure of capacity additions

Lower PTA futures coupled with softer MEG prices in Asia have led to $10-20/ton discounts in export offers out of China and South Korea this week. Also, a bunch of new capacities exerted extra pressure on suppliers despite a modest demand recovery inside China.

Accordingly, FOB China prices dropped to $650-700/ton. A regional trader said that even $640/ton FOB was possible, depending on the volume.

Prolonged lockdowns keep weighing on SEA

PET bottle offers from China neared the $650/ton CIF SEA threshold amid $10-15/ton cuts in prices on the week. Sellers opined, “Although activity slightly picked up in China, the scene in Southeast Asia remains cautious as COVID-19 restrictions persist in most countries. The fluctuating oil prices amid oversupply woes contribute to the weak outlook.”

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Weak May expectations dominate Turkey’s PET market

Import PET bottle prices recorded slight discounts this week as the impact of fluctuating crude oil prices and the COVID-19 outbreak outstripped hopes for a demand recovery amid warmer weather.

A converter highlighted, “Virus-driven restrictions dented demand for water bottles across the country. We don’t foresee a real recovery until after June.”

PET bottle broke below $700/ton CIF Egypt for first time in 12 years

The Ramadan lull has made itself felt more this week in Egypt as prices softened by another $10/ton on both ends of the overall import market. Chinese PET bottle offers slid to $690/ton CIF Egypt, for the first time since 2008, data from ChemOrbis suggested.

Converters think that prices may port additional losses next month considering the fact that import cargos are not deemed as competitive compared to local materials. They added, “The ongoing measures to contain COVID-19 kept most restaurants closed and pre-Ramadan preparations did not take place unlike the previous years.”

Import PET cargos face thin interest in Europe

The region has been hit hard by the COVID-19 pandemic since March. Although some applications are seeing less demand, activity has been healthy in general which counterbalanced each other for PET bottle resin. Import Chinese PET bottle offers were reported below Italy’s spot market while they failed to grab much appetite.

A seller reported selling out his PET bottle cargos with monthly drops of €80/ton. He further said, "Looking at lower PX contracts and the previous losses in the energy complex, buyers expect to hear lower prices in May.”
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