Oil plunge weighs on PET bottle sentiment in Asia, Europe
by Shibu Itty Kuttickal - sikuttickal@chemorbis.com
Asian PET botte prices are under downward pressure as a result of a deep dive in crude oil prices in the latest week -one shortened by the Eid Al Adha holidays in many parts- after rising in the first week of July and then moving sideways. In Europe, the oil plunge has put further pressure on the markets and overshadowed the hike intentions for August.
Prices slightly down in Asia
Export PET bottle prices from China and South Korea were stable to $10/ton lower from last week at $950-990/ton and at $1020-1030/ton, respectively, on FOB, cash basis as of July 20. In Southeast Asia, import PET bottle prices were also stable to $10/ton lower at $1010-1080/ton CIF, cash.
“The latest correction in crude oil may lead to pressure on feedstock PTA and MEG prices going forward,” said a Chinese trader who maintained PET bottle offers this week.
Global crude oil futures fell sharply this week after OPEC+ producers agreed to increase output. The decision has raised concerns over a crude surplus even as COVID-19 cases continue to rise in many countries. On Monday, Brent crude fell by $4.97/bl, or nearly 7%, to $68.62/barrel.
Feedstocks feel the pressure of an oil plunge
Market players expect both MEG and PTA to track the crude oil market in its downward trajectory. But the feedstocks are currently holding on their own respectively at $695/ton CFR China, up $25/ton from last week, and $710/ton CFR China, down by just $15/ton.
“Chinese domestic demand has strengthened but stays tempered by weak regional demand. Southeast Asian demand has remained weak amid the region’s rising COVID-19 spikes, the new virus variants, and fresh lockdowns clamped,” said a source at a Taiwanese producer that kept PET resin prices steady. “The latest crude correction may lead to lower PTA and MEG prices in the near future and add pressure on PET,” he added.
An Indonesian producer also kept offers of PET resin stable this week despite the sharp correction in crude oil, but a source from the producer said, “Domestic demand has remained weak due to the Delta variant related to Covid-19 and lockdowns across key cities.”
“Holidays and the increasing use of enhanced movement control orders across the region have kept demand suppressed. And the latest plunge in crude oil can only be a negative factor for the market,” said a Malaysian converter.
Falling crude overshadows hike intentions for Aug in Europe
Local PET bottle prices in Europe have already been on a downward trend since around early May as demand has been patchy across the regional countries amid unfavorable weather conditions. Players reported that slight hike requests for July did not pass on monthly deals while some suppliers conceded to giving discounts in several cases.
Local PET bottle prices on FD NWE, 60 days excluding VAT basis, were down by around €30-50/ton from last week at €1100-1200/ton.
A distributor noted, “Regional producers have revised their offers down during the month in order to spur sales. Meanwhile, we have heard of hike intentions from some regional producers for August amid the lack of competitive offers from the import market. Yet, a combination of falling crude oil prices and patchy demand is overshadowing such expectations.”
Prices slightly down in Asia
Export PET bottle prices from China and South Korea were stable to $10/ton lower from last week at $950-990/ton and at $1020-1030/ton, respectively, on FOB, cash basis as of July 20. In Southeast Asia, import PET bottle prices were also stable to $10/ton lower at $1010-1080/ton CIF, cash.
“The latest correction in crude oil may lead to pressure on feedstock PTA and MEG prices going forward,” said a Chinese trader who maintained PET bottle offers this week.
Global crude oil futures fell sharply this week after OPEC+ producers agreed to increase output. The decision has raised concerns over a crude surplus even as COVID-19 cases continue to rise in many countries. On Monday, Brent crude fell by $4.97/bl, or nearly 7%, to $68.62/barrel.
Feedstocks feel the pressure of an oil plunge
Market players expect both MEG and PTA to track the crude oil market in its downward trajectory. But the feedstocks are currently holding on their own respectively at $695/ton CFR China, up $25/ton from last week, and $710/ton CFR China, down by just $15/ton.
“Chinese domestic demand has strengthened but stays tempered by weak regional demand. Southeast Asian demand has remained weak amid the region’s rising COVID-19 spikes, the new virus variants, and fresh lockdowns clamped,” said a source at a Taiwanese producer that kept PET resin prices steady. “The latest crude correction may lead to lower PTA and MEG prices in the near future and add pressure on PET,” he added.
An Indonesian producer also kept offers of PET resin stable this week despite the sharp correction in crude oil, but a source from the producer said, “Domestic demand has remained weak due to the Delta variant related to Covid-19 and lockdowns across key cities.”
“Holidays and the increasing use of enhanced movement control orders across the region have kept demand suppressed. And the latest plunge in crude oil can only be a negative factor for the market,” said a Malaysian converter.
Falling crude overshadows hike intentions for Aug in Europe
Local PET bottle prices in Europe have already been on a downward trend since around early May as demand has been patchy across the regional countries amid unfavorable weather conditions. Players reported that slight hike requests for July did not pass on monthly deals while some suppliers conceded to giving discounts in several cases.
Local PET bottle prices on FD NWE, 60 days excluding VAT basis, were down by around €30-50/ton from last week at €1100-1200/ton.
A distributor noted, “Regional producers have revised their offers down during the month in order to spur sales. Meanwhile, we have heard of hike intentions from some regional producers for August amid the lack of competitive offers from the import market. Yet, a combination of falling crude oil prices and patchy demand is overshadowing such expectations.”
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