PET expectations turn softer in Turkey
Plunging PX triggers decrease expectations
Spot PX prices in Asia and Europe have plunged visibly amid a well-supplied market. Spot PX prices on FOB NWE basis have hit a year low following the recent drops while prices on FOB Korea basis moved below the $1000/ton threshold last week for the first time since early January, according to the weekly average data from ChemOrbis Price Wizard.
Prices in Asia and Europe indicate respective drops of nearly 3% and 6% from the beginning of the month on average, meanwhile.
Lower PX prices are expected to be reflected on PET prices, considering that global consumption is below expectations despite the high season. Players said, “We expect to see cost-driven PET drops as there are no market dynamics which can affect the price in an upwards direction in the short run.”
Buyers sit on comfortable stocks
Large buyers have mostly secured their needs earlier in anticipation of seeing seasonal increases, which are yet to come.
A seller confirmed, “Buyers’ current stock levels are comfortable based on their earlier purchases. They might come back to the market after running down their stocks.”
Meanwhile, some buyers refrain from buying beyond what they need to remain cautious amid cash constraints and economic woes. Trading activities may also witness further slowdown during the month of Ramadan, according to players.
Hefty drops unlikely on crude gains
However, oil prices at a 6 month high might take the edge off the downward pressure on PET. Supply concerns pushed global oil benchmarks to their highest levels not seen since November 2018 on average, according to ChemOrbis Price Wizard. Higher crude oil prices are likely to keep the size of expected drops minimum, players opined.
If seasonal demand shows an uptick, this might also prop up prices to an important extent.
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