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PET bottle prices from China break below $800 FOB

by Pınar Polat -
  • 04/03/2020 (10:32)
Muted demand amid the rapid spread of the COVID-19 outbreak has pushed PET bottle prices across Asian markets further down since early week. Export offers from China have broken below the $800/ton FOB level.

According to the weekly average data obtained from ChemOrbis Price Index, PET bottle prices on FOB/ex-warehouse China and CIF SEA have been mostly on a downtrend since early January 2020.

In the past two months, local PET bottle prices in China have lost nearly 10% while both import PET bottle prices in Southeast Asia and export offers from China have retreated around 6%, as data suggest.

China’s PET bottle markets yield to weak demand

Although the sentiment in China’s PET bottle markets improved last week on the back of the gradual recovery in downstream activity, suppliers applied a new round of declines this week amid virus-hit demand, high inventory levels and lower upstream costs.

A trader in China cut its offers to export outlets by $5-10/ton to $795-815/ton FOB, cash. The seller blamed weak domestic demand for his lower offer levels.

A Chinese producer also reduced its export PET bottle offers by $10-15/ton from last week to $800-810/ton FOB China, cash. “Demand remains thin due to the rapid spread of COVID-19. Lower upstream costs have also weighed on the sentiment. Meanwhile, most Chinese producers have cut their operating rates by 10% to 25% due to high inventory pressure,” a company source opined.

Export PET bottle offers from China are currently reported at $795-815/ton FOB, cash basis. The range is down $5-10/ton when compared to last week.

Local PET bottle prices were also down further by CNY50-100/ton ($7-14/ton) on the week to be reported at CNY6100-6200/ton ($770-782/ton without VAT) on an ex-warehouse China, cash including VAT basis.

Import PET prices above $900 threshold disappear in SEA

While Southeast Asian PET markets have remained under pressure from lower offers from China, South Korean and Thai producers have also applied a softer pricing this week.

Lower upstream costs and the virus-hit demand were cited as factors dragging prices down.

In Southeast Asia, import PET prices for all origins decreased $5-20/ton from last week to $805-880/ton CIF SEA, cash basis.

Upstream costs add to downward pressure

Apart from thin demand across the region and inventory pressure in China, weaker upstream costs have also added to the downward pressure on PET prices.

In Asia, spot MEG prices and PTA prices on CFR China basis have decreased $5-10/ton when compared to late February to be currently quoted at around $555/ton and $510/ton, respectively.
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